These 5 Cities Have Surprisingly Affordable Car Insurance Premiums – The Motley Fool

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by Kailey Hagen | Published on Oct. 20, 2022
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You wouldn't know these were some of the largest cities in the country looking at these insurance rates.
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Big cities generally aren’t known for being affordable, especially for those who own cars. Drivers have to pay for parking just about everywhere they go, not to mention gas and maintenance. Then, there’s auto insurance, which tends to be higher in cities due to an increased risk of accidents and theft.
But this isn’t true everywhere. In fact, the following five cities offer surprisingly affordable rates on car insurance premiums.
These five cities have the lowest average monthly car insurance premiums out of the 50 largest cities in the U.S., according to doxo.


But it’s important to note that drivers in these cities can still see premiums that are far off this average. Insurance companies don’t just look at a driver’s city. They also look at the specific ZIP code and the likelihood of accidents and crime in that area, along with the driver’s own history of accidents, their age, marital status, education level, vehicle make and model, and other factors.
To make this even more complex, each insurer weighs these factors a little differently, which is why they all give the same driver different quotes. Some put more emphasis on a driver’s location while others give more weight to whether they have any speeding tickets. Since each company’s formula for calculating premiums is proprietary, the only way to know what it can offer a specific driver is to get quotes.
Here are three steps all drivers can take to reduce how much they pay for their auto insurance:

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Drivers should get quotes from a handful of companies before they purchase a policy. While price is an important factor, it shouldn’t be the only one. Drivers also need to weigh the level of coverage they’re getting, the company’s financial stability, and the quality of its customer service and claims handling.
Reading car insurance reviews is a quick way to get an overview of the strengths and weaknesses of each company. Then, combine this with pricing information to decide which offers the greatest value.
An increasing number of insurers offer usage-based car insurance as an option to interested customers. This monitors a driver’s habits via a mobile app or a small device installed in the vehicle and rewards safer and less frequent drivers with savings. Many companies that offer these programs give drivers an upfront discount just for joining.
However, it’s up to each person to decide if they’re comfortable having their driving habits monitored. Though most companies swear they won’t use the data they gather against policyholders if it reveals unsafe habits, some may raise rates in future policy periods. It’s best to talk to the insurer about what data it will collect and how it will use it before joining one of these programs.
Auto insurance deductibles are the out-of-pocket costs the policyholder pays when filing a claim before the insurance company will pay anything for the damages. Most companies offer drivers a variety of deductibles to choose from. Selecting a higher one can reduce your monthly premiums significantly.
Those who are worried about the financial strain they could face if they have to file a claim should set aside the money they’re saving on premiums each month in an emergency fund until they have enough to cover the policy’s deductible.
It’s impossible to say what kind of savings a driver will end up with by taking these steps because car insurance is so personalized. But it’s a pretty good bet that most drivers will notice a significant difference in their premiums, regardless of where they live, by taking one or more of these actions.

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we've researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.
Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what’s almost a farm in northern Wisconsin with her husband and three dogs.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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