10 Best Auto Insurance Companies for Drivers With Bad Credit (2023)

Geico, Progressive, and State Farm are the best auto insurance companies for drivers with bad credit, with Geico as our top choice. Geico offers various discounts that result in cheap rates for most drivers.

Our other two top choices for the top auto insurance companies for drivers with bad credit are Progressive and State Farm, as both offer personalized coverage options to help drivers lower rates. 

Other great companies to consider for drivers with bad credit include Allstate, Liberty Mutual, and many more. Below, you can see why we chose the top ten companies for drivers with bad credit, with reasons ranging from their discount programs to their customer service agents

Our Top 10 Best Company Picks: Best Auto Insurance for Drivers With Poor Credit

Rank	Company	Usage-Based	Pay-in-Full	Best For
#1	Geico	Up to 25%	Up to 10%	Affordable Rates
#2	Progressive	Up to 30%	Up to 15%	Budgeting Tools
#3	State Farm	Up to 30%	Up to 15%	Agency Network
#4	Allstate	Up to 40%	Up to 10%	Usage-Based Discount
#5	Nationwide	Up to 40%	Up to 15%	Vanishing Deductible
#6	American Family	Up to 30%	Up to 20%	Loyalty Rewards
#7	Liberty Mutual	Up to 30%	Up to 12%	Safe-Driving Discounts
#8	Esurance	Up to 20%	Up to 10%	Online Platform
#9	Farmers	Up to 30%	Up to 10%	Customizable Policies
#10	The General	Up to 25%	Up to 25%	High-Risk Coverage

Keep reading to learn about the best auto insurance for drivers with bad credit and explore your options to further your savings and improve your credit score.

#1 – Geico: Top Pick Overall

Pros

• Great discounts: Geico offers a number of discounts for safe driving, vehicle safety features, and more. 
• User-friendly sites: Both Geico’s website and mobile app are easy to use, making it easy for drivers to make changes to their policies as needed. Read more in our Geico auto insurance review. 
• Great financial stability: Geico has strong financial ratings, which means that the company is financially able to pay out claims without issues. 

Cons 

• Few local agents: Geico doesn’t offer many local agents, which means it can be harder to find in-person help. Instead, Geico customers will usually have to contact Geico over the phone or online. 
• Varying rates: Rates can still be high for drivers with poor credit, depending on other factors like their driving record and location. 

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#2 – Progressive: Best for Budget Comparision

Pros

• Personalized rates: Progressive has a Name Your Price® tool, which allows you to set a budget when looking for coverage. 
• UBI program: Progressive’s Snapshot program rewards safe drivers with a discount, regardless of credit score. Learn more about Progressive’s program in our Progressive auto insurance review. 
• Multiple coverage options: Progressive has numerous add-on coverages, like roadside assistance and rental car reimbursement, that aren’t always offered at other companies. 

Cons 

• Limited bundling: Progressive doesn’t offer many bundling options, which can reduce your saving potential. 
• Higher rates: Progressive has higher rates than most companies, so it may not be the most economical option for drivers with bad credit. 

#3 – State Farm: Best Agent Network

Pros

• Vast agent network: State Farm has multiple local agents, making it easy to get personalized assistance to find coverage that is affordable for drivers with bad credit scores. 
• Multiple coverage options: State Farm has a wide range of coverage options, making it easy to personalize policies to suit a budget (learn more about coverage options in our State Farm auto insurance review).
• Strong financial ratings: State Farm has good financial ratings, which means you don’t have to worry about the company going under from paying out too many claims in a year. 

Cons 

• Not as many online discounts: You may have to participate in driving programs or show proof of eligibility to get additional discounts beyond the online ones. 
• Rates may still be high: State Farm’s rates may still be higher for drivers with bad credit scores, although this doesn’t mean State Farm’s rates will be the most expensive compared to other companies. 

#4 – Allstate: Great UBI Program 

Pros

• Drivewise program: The Drivewise program at Allstate offers great discounts to safe drivers. 
• Multiple coverage options: Allstate has a range of coverage options and add-ons, such as Allstate roadside assistance. 
• Claim satisfaction guarantee: Allstate has a claim satisfaction guarantee, which means that if you aren’t happy with how Allstate handled your auto insurance claim, Allstate will give you premium credit on your policy. 

Cons

• Customer service reviews vary: Allstate has mixed reviews for customer satisfaction, which you can learn more about in our Allstate auto insurance review. 
• Higher rates than average: Allstate has higher rates on average than most companies, so it may not be the cheapest auto insurance company for drivers with bad credit. 

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#5 – Nationwide: Best Deductibles 

Pros

• Vanishing deductibles: Nationwide has a vanishing deductible program, which means that drivers with bad credit can still save with lower deductibles. 
• Competitive discounts: Nationwide offers multiple discounts to help its rates stay competitive with other providers. 
• SmartRide program: Nationwide’s SmartRide usage-based program offers discounts to safe drivers. 

Cons 

• Local agents are not widely available: Nationwide doesn’t have many local agents in some areas, making it harder for drivers with bad credit to find in-person help. 
• Higher rates for poor credit: Nationwide may still charge higher rates for drivers with poor credit scores. 

#6 – American Family: Best for Customer Loyalty 

Pros

• Offers KnowYourDrive program: American’s Family KnowYourDrive usage-based program offers great discounts to safe drivers who participate successfully in the discount program. 
• Loyalty discounts: American Family offers loyalty discounts to drivers who stay with the company, making it a great way for drivers with poor credit to save over time. 
• Accident forgiveness: American Family offers accident forgiveness to qualifying safe drivers, which means their rates won’t go up after their first accident at American Family. 

Cons 

• Poor credit rates may still be high: American Family will still charge higher rates for poor credit scores in some states. 
• Limited availability: American Family is not widely available, so it may not provide car insurance in your state. 

#7 – Liberty Mutual: Great Safe Drivers Discounts 

Pros

• RightTrack program: Liberty Mutual’s usage-based program rewards safe drivers with discounts, regardless of a driver’s credit score. 
• Multiple coverage options: Liberty Mutual has multiple auto insurance coverages, making it easy to personalize your policy to suit your coverage needs. 
• Easy-to-use online platform: Liberty Mutual’s website and app are easy to use, which means drivers can easily view and manage their coverage online. 

Cons 

• Mixed customer service reviews: Liberty Mutual’s customer service reviews vary, with some customers expressing dissatisfaction with their customer service experience. 
• Higher rates for poor credit: In some states, Liberty Mutual may still charge drivers with poor credit more. 

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#8 – Esurance: Best for Auto Insurance Quotes

Pros

• Easy quote process: Esurance has a simple online quote provider, making it quick and easy to get a quote from Esurance to compare to other companies. 
• Competitive rates: Esurance has competitive rates, ensuring it is not the most expensive company for most drivers. 
• DriveSense program: Esurance offers a usage-based program that rewards safe drivers with discounts on their auto insurance. 

Cons 

• Lack of local agents: Esurance doesn’t have many local agents, so you may not be able to get in-person support with your policy. 
• Rates can still be high: Drivers with poor credit scores may still see rate increases at Esurance. 

#9 – Farmers: Best Customizable Coverage

Pros

• Easily customizable coverage: Farmers offers multiple coverage options, so drivers with poor credit can easily choose coverages that fit their budget. 
• Multiple discounts: Farmers has multiple auto insurance discounts available, which can help drivers with poor credit lower their rates. 
• Signal program: Farmers has a safe driving program called Signal that offers discounts to safe drivers. 

Cons 

• Lack of local agents: Farmers has limited local agent availability, which can make it hard to get in-person assistance. 
• Rates can still be high: Drivers with bad credit scores may still be charged more at Farmers. 

#10 – The General: Best High-Risk Policies

Pros

• Specialized high-risk policies: The General provides high-risk insurance to drivers, so it is knowledgeable in providing coverage to drivers with poor credit, accidents, and more. 
• Provides coverage to poor credit drivers: The General will still accept drivers with poor credit scores. 
• Quick quotes online: The General has a simple quote provider on its website, making it easy to get an estimate. 

Cons 

• Lack of coverage options: The General doesn’t provide as many auto insurance coverage options as other auto insurance companies. 
• Higher rates: The General has higher rates for drivers that are higher risk, as such as drivers with poor credit scores. 

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Bad Credit Scores and Auto Insurance Rates

A bad credit score can lead to higher interest rates, fewer loan options, and missed job opportunities. It also leads to higher insurance rates.

So what counts as a bad credit score?

Credit scores fall into the following categories:

• 300 to 579 – Bad
• 580 to 669 – Fair
• 670 to 739 – Good
• 740 to 799 – Very good
• 800 to 850 – Excellent

Drivers with poor credit scores pay $100 more on average compared to people with very good credit. However, companies have unique formulas for determining rates; some are less harsh on credit scores than others.

When you’re shopping for car insurance, you shouldn’t look at just the big companies. Smaller local providers might be more affordable than big-name insurance.

Why Auto Insurance Companies Look at Credit Scores

Car insurance companies look at various factors when determining your rates to assess your risk. The higher the likelihood you’ll cost the company, the more you’ll pay for insurance.

While that reasoning makes sense for driving records, why do auto insurance companies look at credit scores?

Insurance companies carefully track claims data. For example, companies can look at who’s more likely to file a claim by demographic, explaining why men usually pay more for insurance than women. Unfortunately, claims data suggests that people with lower credit scores are more likely to file a claim.

Not only are people with lower credit scores more likely to file a claim, but companies tend to pay more for those claims than for other credit score groups.

Unless you get usage-based insurance, insurers won’t individualize your rates. Instead, you’re assigned a rate based on your demographics. So, for example, your insurance rates might increase even if you haven’t filed a claim because drivers in your area did.

Companies That Don’t Use Credit Scores

Unfortunately, there aren’t many auto insurance companies that don’t check credit scores. About 95% of all standard car insurance providers use a credit check.

Read more: Best Auto Insurance Companies That Don’t Check Credit

The only exception is in states that banned car insurance bad credit rate increases. The following states prohibit insurance companies from checking credit to determine rates:

• Washington
• Michigan
• Hawaii
• Massachusetts
• California

The other 45 states, along with Washington D.C., allow for credit checks, so there’s a good chance your score will shape your rates.

Many states allow credit scores to determine your rates but make it illegal for a company to deny you coverage based on a credit check. The best auto insurance companies for high-risk drivers are always an option if an insurer rejects coverage due to your credit score.

High-risk insurance works for drivers that other companies pass on, including people with extremely low credit scores. Your rates will be higher, but you’ll at least have the coverage you need.

Best Auto Insurance Companies’ Rates by Credit Score

Although credit scores are just one factor in setting your insurance rates, it’s an important one. Check the rates below to see how our top ten companies charge different credit score groups for insurance.

As you can see, there’s a significant difference in rates between the excellent and poor credit groups. However, the gap is less with companies like Geico, so comparing quotes is vital.

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How Your Location Affects Auto Insurance Rates for Drivers With Bad Credit

While credit is an essential aspect of your car insurance rates, your location is another crucial factor. Check below for the average rates in your state.

As you can see, there’s a lot of variation by state. This difference is due to various factors, including the minimum amount of insurance required by the state.

Insurance companies keep careful track of who makes claims by ZIP code. Some states see higher rates than others because of increased accidents, traffic infractions, and other claims. 

How To Find Affordable Insurance With Bad Credit

Finding affordable services with poor credit can feel like a never-ending battle. However, there are ways for you to find the most affordable bad credit auto insurance. Consider the following methods to find coverage:

• Take advantage of discounts. Most companies offer auto insurance discounts to help customers save. Look at companies with discounts and cheap car insurance for bad credit, like Geico.
• Pick the right coverage. Depending on your car, you might be able to drop some coverage. Speak with an insurance representative if you need help deciding what to cut.
• Choose when to file a claim. Ensure the rate increase will be less than the repair bill. The average at-fault accident increases rates by almost $800 a year, so consider paying for minor repairs out of pocket.
• Raise your deductible. You can raise your deductible to lower monthly rates, but you’ll have to pay more out of pocket before insurance kicks in.
• Try usage-based insurance. Usage-based auto insurance tracks your driving habits and mileage. It’s a solid alternative to standard insurance if your rates are high due to credit scores.
• Shop around. Even if you already have insurance, there’s no harm in looking at quotes. Comparing prices is the best way to ensure you have the best deal.

These tips are great ways to look for affordable auto insurance for bad credit immediately, but there’s another way to lower your rates. It takes longer, but it’s worth the effort to improve your credit score when your work pays off.

Tips to Improve Your Credit Score

Improving your credit score is often tricky, especially if your budget is tight. However, improving your score will help you in a multitude of ways, only one of which is lowering your bad credit auto insurance rates.

If you need to improve your credit score, try these simple tips:

• Avoid new accounts. While opening a new credit card might be tempting, you should avoid new applications. Hard checks on your credit score will lower it.
• Pay off balances. Focus on as many discretionary funds as possible to pay existing credit card debt. Then, pay off your full balance monthly to reduce your credit utilization.
• Set up automatic payments. Late payments negatively impact your score. Most services offer an auto-pay option if you struggle to pay your bills on time.
• Monitor your score. Use credit monitoring to check your account and dispute errors as they arise. Not only can you keep your score clean this way, but you can also monitor for identity theft.

Building your credit score is often a long process, but the end result is worth it. As your score climbs, inform your insurance company so it can adjust your rates.

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Finding the Best Auto Insurance for Drivers with Bad Credit

A poor credit score is never a fun place to find yourself, but it’s not the end of the world. Your long-term goal should be to increase your score, and you can find affordable car insurance along the way. By looking for discounts, shopping at companies favorable to poor credit, and choosing the right coverage, it is possible to find the cheapest car insurance for someone with bad credit.

One of the most important steps in finding affordable bad credit car insurance is to shop around. Compare quotes with as many companies as possible to find the best insurance.

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