scroll top

Free car insurance? Sorry. But there are ways to lower your premiums

We earn commissions for transactions made through links in this post. Here's more on how we make money.

A study by U.S. News and World Report1 found that the average annual cost of a car insurance policy is $1,547 — or about $130 per month. That number is higher in certain states or if you have multiple offenses on your driving record. 

If you rely on a car to get around, having car insurance is not only crucial but required by law in 48 states (except New Hampshire and Virginia). You could face hundreds or even thousands of dollars in fines for driving without insurance and have your license suspended. 

In this post, we’ll cover: 

Is there such a thing as free car insurance?

Government programs to help with car insurance premiums

7 ways to reduce your car insurance premiums

  1. Check rates from lesser-known insurance carriers
  2. Shop regularly for lower rates
  3. Increase your deductible
  4. Bundle your insurance policies
  5. Strip out the extras
  6. Ask about safe-driving incentives
  7. Look for discounts through your employer, school or organization

Charities that help with car insurance payments

How to avoid car insurance scams

Is there such a thing as free car insurance?

In most states, there is no way to get truly free car insurance (Hawaii is the exception, though coverage is very limited). However, there are a number of ways to reduce the cost of your insurance or get help with insurance payments. 

Government programs to help with car insurance premiums

Only California, Hawaii, and New Jersey have dedicated programs to assist lower-income drivers with their car insurance premiums: 

California’s Low Cost Auto (CLCA)

In place since 1999, California’s Low Cost Auto insurance program (CLCA)2 provides discounted liability protection for California drivers who meet the following eligibility requirements:

  • Income within 250% of the federal poverty limit
  • Own a car that’s worth less than $25,000
  • Have a good driving record

The cost of CLCA insurance depends on your county, age, and the length of time you’ve been a licensed driver. For example, a qualifying person over the age of 24 in Fresno County who has been driving longer than three years can pay an annual premium of $232.

CLCA covers:

  • $10,000 bodily injury per person
  • $20,000 bodily injury per accident
  • $3,000 property damage liability per accident

Eligible households can also pay to add medical payments or uninsured motorist coverage (which covers you in the event you get into an accident with an uninsured driver):

  • $10,000 uninsured motorist bodily injury per person
  • $20,000 uninsured motorist bodily injury per accident
  • $1,000 medical payments per person

New Jersey Special Automobile Insurance Policy (SAIP)

In New Jersey, the Special Automobile Insurance Policy (SAIP)3 is available to drivers who are eligible for Federal Medicaid with hospitalization. The coverage costs $365 per year but offers only minimal coverage, including: 

  • Emergency medical costs if you are injured in an accident
  • Treatment immediately following an accident
  • Treatment of serious brain and spinal cord injuries up to $250,000
  • $10,000 death benefit

SAIP does not cover liability costs or any damage to the policyholder’s vehicle. 

Hawaii’s no-fault auto insurance

To qualify for Hawaii’s free, no-fault auto insurance policy,4 an individual must meet the following conditions:

  • Recipient of financial assistance payments or SSI benefits
  • Possess a valid driver's license (unless you are an unlicensed permanently disabled individual who is unable to operate their own vehicle)
  • Sole registered owner of the vehicle

Coverage is only free for one vehicle per household, unless you can prove that an additional vehicle is used to get to work or for transportation to a medical facility at least twice per month.

7 ways to reduce your car insurance premiums

There are a number of ways you can reduce your car insurance premiums:

1. Check rates from lesser-known insurance carriers

Insurance companies like Geico, Progressive, and State Farm are household names, but there are plenty of lesser-known and regional carriers that may offer lower rates in your area. 

Shop around to find the best rate available to you. You can also work with an independent insurance agent who can provide quotes from multiple companies and help you choose which one makes the most sense for you. 

U.S. News1 put together this ranking of average annual costs by major carriers:

  1. USAA: $1,022
  2. Geico: $1,250
  3. State Farm: $1,279
  4. Travelers: $1,355
  5. American Family: $1,383
  6. Nationwide: $1,473
  7. Progressive: $1,540
  8. AAA: $1,958
  9. Farmers: $2,083
  10. Allstate: $2,135 

One Reddit user said that in his experience, smaller carriers are more efficient when you need to file a claim:

by from discussion

2. Shop regularly for lower rates

John Crist, founder of Prestizia Insurance in Dallas, recommends shopping for lower insurance rates every six to 12 months or after significant life changes, like marriage. 

“Auto insurance pricing isn’t static,” he says. “It fluctuates based on various factors, including changes in your personal driving record, the insurance company's overall claims history, and even broader economic elements.”

Crist says if you find a cheaper policy that is comparable to the one you currently have, you should contact your current insurer to see if they’d be willing to match the lower price or offer you a discount. If they won’t, consider switching to the lower-cost policy. 

Reddit user eucalyptusmacrocarpa says threatening to leave an insurer can help you secure a lower rate:

by from discussion

3. Increase your deductible

If you have the ability to cover the higher out-of-pocket cost in the event you need to file a claim, Crist says you can reduce your car insurance premium by increasing your deductible.

One Reddit user recommends putting aside any money you save into an emergency fund: 

4. Bundle your insurance policies

Bundling policies, such as auto with renters or homeowners insurance, can help you save money on all of your insurance premiums.

For example, Allstate advertises that customers can save up to 25% by bundling home and auto policies.5

“It’s also beneficial to engage with an experienced insurance agent who can guide you through the process, helping to tailor a policy to your specific needs while uncovering opportunities for savings,” Crist says.

Buy here pay here car lots? There are better options for buying a car with no credit

Can't afford your car payment? See if you qualify to refinance for a lower payment.

Auto Credit Express is A+ rated with the Better Business Bureau:

  • Average Saving:  $1,700 or $143 per month
  • Minimum Credit Score: 525
  • APR from 3.99%
  • Loan Amounts: $5,000 – $45,000
  • Vehicle Criteria: Under 10 Years/150K Miles

Get a refi quote from Auto Credit Express in 30 seconds >>

5. Strip out the extras

You may be able to lower your insurance payment by getting a barebones policy without common “extras.”

For example, you can get roadside assistance, sometimes for free, without going through your insurance company. You can also leave off extras like rental car coverage (see our posts on how to get free rides and free local bus passes).

However, Crist says there are some “must-haves” in every car insurance policy, including: 

  • Liability coverage that sufficiently protects your assets in case you’re found at fault in an accident
  • Uninsured/underinsured motorist coverage to protect yourself against drivers with insufficient coverage

“Ensure you understand the implications and risks before removing any coverage,” Crist says.

6. Ask about safe-driving incentives

A man and a woman buckling up inside a car. Free car insurance? Sorry. But there are ways to lower your premiums. Check them here.

Many insurance companies offer incentives to lower premiums, including:

  • Safe-driving bonuses when you go for a period of time without filing a claim
  • Discounts for completing defensive driving courses
  • Devices that monitor driving habits
  • Discounts for safety features like anti-theft devices

Stephen R. Hasner, managing partner of Hasner Law PC in Vinings, Ga., helps clients who have been in serious car accidents.

He says insurance companies raise premiums for higher-risk applicants because they assume they are more likely to have an accident — and need coverage — soon. Completing a defensive driving class indicates you have specialized knowledge of road safety practices. 

“It automatically lowers your perceived risk, which, in turn, translates into a cheaper, more affordable insurance rate,” Hasner says.

Reporting mileage can also lower premiums, especially for people who primarily work from home or have short commutes, Crist says.

Reddit user desertsnakes recently switched to a car insurance plan that allows for biannual mileage reporting:

byu/Fategfwhere from discussion

7. Look for discounts through your employer, school or organization

You may be eligible for insurance discounts through your employer, university, credit union, or through a professional association to which you belong. 

Thanks to a partnership between an insurance provider and his employer, Reddit user baconwiches said he was able to lower his annual car insurance premium from $3,000 to $1,300:

by from discussion

Did you know your car could be repossessed if you're uninsured? Check out our post on what to do if your car is repossessed.

Charities that help with car insurance payments

You may be able to get temporary assistance to cover car insurance payments from local charities or churches. 

For example, North Hills Community Outreach in Pittsburgh, Pa., offers financial assistance for qualifying residents that covers: 

  • Car repairs
  • Gas cards
  • Insurance payments
  • Loan payments
  • PennDOT services
  • AAA memberships
  • Car seats
  • Public transit passes 

Search for “charities in CITY that help with car insurance payments.”

Also, check out our post on charities that help single moms and resources for free car repairs and free car seats.

How to avoid car insurance scams

When you’re shopping for car insurance, it’s important to consult third-party review sites like the Better Business Bureau and Trustpilot to make sure you’re working with a legit company with positive customer reviews. 

Insurance agent fraud occurs when an insurance agent or broker offers fake policies in exchange for premium payments, without ever setting up coverage. Agents may also add additional coverage to your policy without your knowledge to charge you a higher premium, a practice known as “sliding.”

One insurance agent in Florida6 was charged with writing 11 fake policies for seven people, totaling more than $122,000 worth of premium payments. 

Hasner said to look for the following signs of agent fraud:

  • Rates seem too affordable. He recommends looking up the average cost of insurance in your state as a benchmark for comparison. 
  • Grammar/spelling issues in the agreement. A professional insurance agency will have their contracts verified by legal professionals and proofread for accuracy. 
  • The agent doesn’t cover your jurisdiction. “If an agency that offers Georgia-based insurance coverage tries selling you a policy online for, say, Utah, I'd consider that a red flag.”
  • They don’t have an online presence or details they shared with you don’t add up. If the information on a person’s LinkedIn profile or website doesn’t match the information they include in their emails or texts, that agent may not actually be working for the firm they claim.

You can find licensed insurance agents through your state’s insurance license database. Just search for “YOUR STATE licensed auto insurance agents” (the website URL should end in .gov). 

Also, make sure to review your auto insurance agreement before committing to a rate to make sure you aren’t paying for coverage you don’t need.

If you’re short on cash to cover your car insurance premium, check out these posts for tips and resources to secure extra cash: 

If you're ready to buy a car, but you have low or no credit, Auto Loan Express is a quality lender:

  • Better Business Bureau rating of A+
  • In business since 1999
  • For new or used cars
  • Auto loans and refi for buyers who have low or no credit, or who have gone through bankruptcy or had a vehicle repossessed
  • Pre-approval within 30 seconds

24 hours to a car loan with Auto Loan Express >>


  1. “The Average Cost of Car Insurance in the U.S.,” by John Dilmore, Jan. 30, 2024. U.S. News and World Report.
  2. “California's Low Cost Auto Insurance Program,” California Department of Insurance.
  3. “Special Automobile Insurance Policy (SAIP),” State of New Jersey Department of Banking and Insurance.
  4. “Motor Vehicle Insurance Information,” Hawaii Department of Commerce and Community Affairs.
  5. Allstate.
  6. “Florida insurance agent faces serious charges after being accused of fraud,” Nov. 1, 2023. NBC6 and WPTV.

Leave a Reply

Your email address will not be published. Required fields are marked *