dcsimg
Call Us Toll Free: 1-855-430-7753
Go To Top
Get Personalized Car Insurance Quotes
Age
Currently Insured?

Why do the rates vary so much between insurance companies?


Car insurance premiums can vary significantly between insurance companies due to the rating factors they use, the statistical information they look at, their own claims experience and the cost of doing business. We'll explain this in detail, and provide examples of how rates can differ, sometimes by a lot, sometimes by a little, depending on the company.

Auto insurance rates vary from one insurance company to another because each uses its own unique formula to assess risk and determine how much you pay. All insurance companies will base your rate on the following variables, but no two companies will have the same exact end result:

  • How much risk you present to an insurance company
  • What it costs your insurer to conduct business
  • How much money your insurance carrier estimates it will need to pay all claims during the year

For example, you’ll see in the chart below that the cheapest price for the same policy can be hundreds of dollars less than the most expensive.

Enter your state in the search field to see how much average rates differ by company for a full coverage policy:

StateCompanyAverage annual rate
AlaskaState Farm$979
AlaskaGeico$1,075
AlaskaProgressive$1,080
AlaskaAllstate$1,304
AlabamaGeico$759
AlabamaMid Century$1,172
AlabamaNationwide$1,197
AlabamaAllstate$1,257
AlabamaState Farm$1,572
AlabamaProgressive$1,840
ArkansasGeico$980
ArkansasState Farm$1,165
ArkansasFarmers$1,176
ArkansasNationwide$1,483
ArkansasProgressive$1,594
ArkansasAllstate$1,821
ArizonaGeico$977
ArizonaProgressive$1,047
ArizonaFarmers$1,195
ArizonaState Farm$1,392
ArizonaNationwide$1,719
ArizonaAllstate$1,807
CaliforniaGeico$944
CaliforniaUnited Financial$1,128
CaliforniaNationwide$1,379
CaliforniaNationwide$1,756
CaliforniaFarmers$1,932
CaliforniaState Farm$1,967
ColoradoGeico$813
ColoradoState Farm$1,241
ColoradoFarmers$1,516
ColoradoProgressive$1,559
ColoradoAllstate$1,889
ConnecticutGeico$946
ConnecticutNationwide$1,254
ConnecticutState Farm$1,463
ConnecticutProgressive$2,026
ConnecticutAllstate$2,462
ConnecticutForemost$2,478
DCGeico$713
DCProgressive$1,496
DCState Farm$1,518
DCNationwide$1,977
DCAllstate$2,913
DelawareGeico$1,134
DelawareProgressive$1,333
DelawareNationwide$1,492
DelawareState Farm$1,872
DelawareAllstate$2,398
FloridaGeico$1,192
FloridaState Farm$1,611
FloridaProgressive$1,754
Florida21st Century Centennial$1,972
FloridaAllstate$2,584
GeorgiaGeico$762
GeorgiaNationwide$1,303
GeorgiaState Farm$1,372
GeorgiaProgressive$1,563
GeorgiaAllstate$1,701
HawaiiGeico$857
HawaiiState Farm$1,023
HawaiiAllstate$1,389
HawaiiProgressive$1,646
HawaiiFarmers$2,376
IowaAmco Ins Co$645
IowaGeico$693
IowaFarmers$933
IowaState Farm$945
IowaProgressive$1,286
IowaAllstate$1,589
IdahoGeico$713
IdahoFarmers$800
IdahoState Farm$845
IdahoProgressive$848
IdahoDepositors Ins Co$863
IdahoAllstate$1,577
IllinoisGeico$590
IllinoisAmco Ins Co$678
IllinoisState Farm$1,011
IllinoisIllinois Farmers$1,170
IllinoisProgressive$1,193
IllinoisAllstate$1,375
IndianaGeico$651
IndianaIllinois Farmers$748
IndianaProgressive$854
IndianaNationwide$866
IndianaState Farm$1,095
IndianaAllstate$1,569
KansasNationwide$814
KansasGeico$823
KansasState Farm$1,166
KansasFarmers$1,249
KansasProgressive$1,682
KansasAllstate$1,718
KentuckyGeico$881
KentuckyNationwide$1,631
KentuckyProgressive$1,693
KentuckyState Farm$1,734
KentuckyAllstate$2,822
LouisianaGeico$1,540
LouisianaState Farm$2,023
LouisianaAllstate$2,316
LouisianaProgressive$2,881
MassachusettsGeico$865
MassachusettsState Farm$884
MassachusettsProgressive$1,272
MassachusettsAllstate$1,742
MarylandProgressive$1,102
MarylandNationwide$1,114
MarylandGeico$1,199
MarylandState Farm$1,357
MarylandAllstate$2,177
MaineGeico$517
MaineState Farm$948
MaineProgressive$1,025
MaineAllstate$1,212
MichiganGeico$1,027
MichiganProgressive$1,714
MichiganTitan$2,177
MichiganAllstate$2,849
MichiganState Farm$3,135
MichiganFarmers$3,999
MinnesotaGeico$935
MinnesotaIllinois Farmers$1,030
MinnesotaAllied$1,188
MinnesotaState Farm$1,190
MinnesotaProgressive$1,295
MinnesotaAllstate$1,483
MissouriAllied$724
MissouriGeico$800
MissouriFarmers$1,051
MissouriState Farm$1,279
MissouriProgressive$1,303
MissouriAllstate$1,769
MississippiGeico$894
MississippiNationwide$1,184
MississippiProgressive Gulf Ins Co$1,268
MississippiState Farm$1,353
MississippiAllstate$1,917
MontanaGeico$848
MontanaProgressive$1,112
MontanaState Farm$1,149
MontanaDepositors$1,238
MontanaMid Century$1,244
MontanaAllstate$1,753
North CarolinaProgressive$622
North CarolinaGeico$704
North CarolinaState Farm$845
North CarolinaFarmers$1,046
North CarolinaNationwide$1,071
North CarolinaNationwide$1,205
North CarolinaAllstate$1,230
North DakotaAllied$753
North DakotaGeico$897
North DakotaProgressive$1,047
North DakotaState Farm$1,132
North DakotaAllstate$1,502
North DakotaMid Century$2,560
NebraskaAllied$711
NebraskaGeico$978
NebraskaState Farm$1,003
NebraskaMid Century$1,192
NebraskaAllstate$1,393
NebraskaProgressive$1,403
New HampshireGeico$550
New HampshireNationwide$867
New HampshireState Farm$1,036
New HampshireProgressive$1,465
New HampshireAllstate$1,588
New Jersey21st Century Centennial$762
New JerseyGeico$1,104
New JerseyProgressive$1,255
New JerseyAllstate NJ$1,761
New JerseyState Farm$1,847
New MexicoGeico$894
New MexicoProgressive$998
New MexicoState Farm$1,177
New MexicoFarmers$1,251
New MexicoAllstate$1,948
NevadaGeico$1,342
NevadaMid Century$1,537
NevadaProgressive$1,663
NevadaState Farm$1,726
NevadaVictoria$1,955
NevadaAllstate$2,256
New YorkGeico$993
New YorkProgressive$1,160
New YorkAllstate$1,587
New YorkState Farm$1,855
New YorkNationwide$2,098
New YorkForemost$2,858
OhioGeico$619
OhioState Farm$881
OhioFarmers$887
OhioProgressive$999
OhioNationwide$1,015
OhioAllstate$1,310
OklahomaGeico$1,050
OklahomaFarmers$1,327
OklahomaState Farm$1,416
OklahomaAllstate$1,918
OklahomaProgressive$2,506
OregonGeico$933
OregonState Farm$1,043
OregonNationwide$1,121
OregonProgressive$1,238
OregonFarmers$1,594
OregonAllstate$1,656
PennsylvaniaGeico$703
PennsylvaniaNationwide$711
PennsylvaniaState Farm$1,284
PennsylvaniaAllstate$1,729
PennsylvaniaProgressive$3,183
Rhode IslandState Farm$1,132
Rhode IslandGeico$1,292
Rhode IslandNationwide$1,678
Rhode IslandProgressive$2,092
Rhode IslandAllstate$2,246
South CarolinaGeico$1,050
South CarolinaAllstate$1,178
South CarolinaNationwide$1,200
South CarolinaProgressive$1,359
South CarolinaState Farm$1,511
South DakotaGeico$708
South DakotaNationwide$938
South DakotaMid Century$982
South DakotaState Farm$1,052
South DakotaProgressive$1,110
South DakotaAllstate$1,562
TennesseeGeico$764
TennesseeNationwide$796
TennesseeState Farm$1,131
TennesseeProgressive$1,223
TennesseeMid Century$1,576
TennesseeAllstate$1,794
TexasFarmers$905
TexasGeico$1,027
TexasColonial$1,247
TexasProgressive$1,328
TexasState Farm$1,348
TexasAllstate$1,949
UtahGeico$684
UtahMid Century$1,016
UtahAllied$1,119
UtahAllstate$1,353
UtahProgressive$1,503
UtahState Farm$1,518
VirginiaNationwide$744
VirginiaGeico$894
VirginiaState Farm$969
VirginiaAllstate$1,102
VirginiaProgressive$1,150
VermontGeico$485
VermontNationwide$789
VermontProgressive$1,103
VermontAllstate$1,183
VermontState Farm$1,255
WashingtonNationwide$1,028
WashingtonGeico$1,075
WashingtonProgressive$1,092
WashingtonState Farm$1,160
WashingtonFarmers$1,335
WashingtonAllstate$1,455
WisconsinGeico$663
WisconsinState Farm$914
WisconsinMid Century$1,021
WisconsinArtisan$1,176
WisconsinAllstate$1,484
WisconsinNationwide$2,851
West VirginiaGeico$1,149
West VirginiaProgressive$1,238
West VirginiaState Farm$1,309
West VirginiaNationwide$1,327
West VirginiaAllstate$1,853
WyomingState Farm$1,128
WyomingGeico$1,287
WyomingFarmers$1,688
WyomingAllstate$1,874

*Rates were fielded by Quadrant Information Services from up to six major insurers in nearly every ZIP code of each state. Driver profile: male, age 40, married, clean record and good credit, driving 2016 Honda Accord. Full coverage of 100/300/100 with comprehensive and collision; $500 deductible.

Here are nationwide average car insurance rates by company:

  • Geico: $901
  • Nationwide/Allied; $1,227
  • State Farm: $1,313
  • Farmers: $1, 351
  • Progressive: $1,415
  • Allstate: $1,758

Assessing your risk

Weighting different factors about you

Insurance companies assess a number factors to determine your likelihood of experiencing an accident or loss, or how much of a risk you pose. Not all companies consider the same factors. Additionally, some companies attach more significance to certain factors than others. That means your rates will vary from one insurance company to another depending upon the rating factors each insurer uses and the weight they place on the different factors.

The following factors influence car insurance rates as they are commonly used by insurers to assess if you are a high-risk driver or not:

  • Your age
  • The make and model of your car
  • Your driving record
  • Where you drive and keep (garage) your car
  • Your claims history 
  • Your credit rating

 

Using statistics to help assess risk

Auto insurance companies analyze statistical information about millions of drivers. They then use it to identify characteristics of drivers who are more likely to file claims that the company would have to pay. The statistical information that insurance companies collect regarding driver types and so on can differ, so that as well can make insurance rates differ.

When calculating how much you pay, insurance carriers also usually group you together with other people whose age, sex, occupation and experience are similar to yours. If you fall in a group considered low risk, you are likely to pay less for coverage than if you are put in a group considered high-risk.

Planning for future claims costs

The amount needed by the insurer to cover the costs of accidents or losses that may happen in the future also plays a role in determining your rate, and also varies by company. Since insurance companies can’t see into the future, they must use past claims history and experiences to help determine future losses that they will have to pay out on. Because each company has had different claims experiences with the groups of people they insure, the rates charged by different companies are never identical.

The cost of doing business

There is also the varying cost of doing business as an insurance provider that is taken into account when rates are set. Each company's cost of doing business (how much they pay to sell and service policies), along with their financial goals, is different, resulting in different prices being charged.

Comparing rates is the smartest way to save on car insurance

Car insurance premiums can vary widely between insurance companies due to the rating factors they use, the statistical information they look at, their own claims experience and the cost of doing business. That’s why to get the best rates you need to do a car insurance comparison, and see which companies have the lowest rates for the coverage you want. Enter your ZIP code and in the tool below, and you’ll see average car insurance rates for the coverage level selected. You’ll also see the highest and lowest rate fielded from up to six major insurers – for the same policy. This shows you how much you can save by comparison shopping.

 

Car insurance companies and customer service


Knowing the reasons why car insurance rates are never the same for any two insurance companies provides incentive to comparison shop. But Penny Gusner, consumer analyst for CarInsurance.com, says you should never select an insurer on price alone. It's wise to consider how you will be treated when you actually have to use your insurance and file a claim. Here are how major insurers scored, out of 100, on Insure.com's Best Car Insurance company survey of 3,700 consumers. Participants were asked about value for price, customer service and claims handling.

RankCompanyOverall Score
1USAA89.98
2American Family88.34
3Allstate88.34
4CSAA Insurance Group88.09
5Mercury87.71
6Auto Club of Southern California (Auto Club Enterprise Insurance Group)87.67
7Liberty Mutual87.17
8The Auto Club Group (ACG) - AAA86.84
9Progressive86.56
10Erie86.31
11Geico86.00
12The General85.81
13Farmers85.24
14State Farm84.76
15Esurance84.56
16Nationwide84.40
17Metlife84.29
18Safeco83.35
19Hartford82.80
20Travelers81.34

Comments

Tell us your thoughts

Leave a Comment
 

0 Responses to "Why do the rates vary so much between insurance companies?"
Disclaimer: Answers and comments provided are for information purposes. They are not intended to substitute informed professional advice. These responses should not be interpreted as a recommendation to buy or sell any insurance product, or to provide financial or legal advice. Please refer to your insurance policy for specific coverage and exclusion information. Please read our Terms of Service.