What Car Insurance is Cheapest for First-time Drivers in Indianapolis?

You have most likely seen the commercials from auto insurance companies like Allstate and Progressive that promise big savings. So drivers just need to pick the company with the cutest commercial, right?

That is not the case, however, as there are a whole slew of unknown elements like if you own or rent your home, what level of deductibles you wish to have, if you are currently insured, and if you have a spouse, that all help calculate your car insurance rates. The information below covers the types of situations that result in high rates and will hopefully give the reader a good start in finding the cheapest insurance in Indianapolis.

Deciphering which companies have the cheapest auto insurance rates for first-time drivers involves a little more effort in order to find a policy that fits your budget.

Every insurance provider uses a different method to set policy rates, so we will examine the most affordable auto insurance companies in Indiana. It’s a good idea to be aware that Indianapolis auto insurance rates are based on many factors which can substantially change the price you have to pay. Simply turning a year older, having a teen driver, or having a fender bender can trigger changes in premium that can now make some companies much cheaper than others.

Best Car Insurance Prices for Inexperienced Drivers

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Indiana auto insurance company rankings
Rank Company Cost Per Year
1 Travelers $614
2 Cincinnati Insurance $664
3 USAA $667
4 Erie $733
5 Western Reserve $838
6 Indiana Farmers Mutual $841
7 Auto-Owners $888
8 The Hartford $889
9 Nationwide $930
10 Safeco $983
11 Utica National $985
12 State Farm $987
13 Motorists Mutual $996
14 Hastings Mutual $1,013
15 Farmers $1,022
16 Wolverine Mutual $1,061
17 Westfield $1,094
18 GEICO $1,122
19 Progressive $1,128
20 State Auto $1,131
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Travelers may offer some of the best car insurance rates in Indianapolis at around $614 per year. This is $626 less than the average rate paid by Indiana drivers of $1,240. Cincinnati Insurance, USAA, Erie, and Western Reserve also qualify as some of the lowest-priced Indianapolis, IN insurance companies.

As the example above demonstrates, if you buy coverage from Erie and switched to Travelers, you might see an annual savings of roughly $119. Drivers with Western Reserve may save as much as $224 a year, and Indiana Farmers Mutual policyholders might lower prices by $227 a year.

It’s important to note that these estimates are averaged for all insureds and vehicles and and are not calculated with a specific location for first-time drivers. So the insurer that has the cheapest price for you may not even be in the list above. That point stresses why you need to compare as many prices as possible using your own personalized driver profile and vehicle information.

One of the many considerations that help determine insurance cost is where your car is garaged in Indianapolis. Areas with increased crime or more people are more likely to have higher rates, whereas areas with lower crime rates and fewer weather claims can boast about having cheaper rates.

The illustration below shows the most expensive places in Indiana for first-time drivers to purchase a policy in. Indianapolis is listed at #6 with the annual price of $1,060 for the average insured, which is approximately $88 per month.

How much does car insurance cost in Indianapolis, IN?
Rank City Annual Premium
1 Gary $1,347
2 Hammond $1,327
3 Merrillville $1,128
4 Portage $1,093
5 Evansville $1,077
6 Indianapolis $1,060
7 New Albany $1,059
8 Lawrence $1,055
9 Jeffersonville $1,048
10 Terre Haute $1,045
11 Anderson $1,041
12 Kokomo $1,001
13 South Bend $985
14 Elkhart $985
15 Columbus $984
16 Fishers $983
17 Bloomington $968
18 Greenwood $960
19 Fort Wayne $956
20 Mishawaka $936
21 Richmond $935
22 Carmel $929
23 Muncie $927
24 Noblesville $920
25 Lafayette $917
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Premium costs are estimated as the specific area where the vehicle is garaged can alter coverage rates significantly.

The type of vehicle you are trying to insure is a significant factor when shopping around for cheaper insurance for first-time drivers. Vehicles with average performance, an excellent safety record, or a low likelihood of having liability claims will cost substantially less to insure than higher performance models.

The next list showcases auto insurance prices for a selection of the more affordable automobiles to insure.

Cheapest Vehicles to Insure in Indianapolis, IN
Vehicle Insured Estimated Cost for Full Coverage
Honda Accord LX-P 4-Dr Sedan $4,155
Honda CR-V LX 2WD $4,161
Hyundai Elantra GLS Touring Station Wagon $4,155
Ford Escape Limited 2WD $4,196
Toyota Prius $4,496
Ford F-150 XLT Crew Cab 2WD $4,665
Volkswagen Jetta 2.0T Station Wagon $4,759
Chevrolet Equinox LS 2WD $4,927
Toyota Tacoma Double Cab 4WD $4,932
Toyota RAV4 Limited 4WD $4,927
Chevrolet Silverado LT Extended Cab 4WD $4,933
Jeep Grand Cherokee Laredo 2WD $4,927
Ford Explorer Limited 2WD $4,966
Dodge Grand Caravan SXT $4,976
Dodge Ram 3500 Crew Cab Laramie 2WD $4,966
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Data rating is based on single female driver age 17, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Indiana minimum liability limits. Discounts applied include safe-driver, and claim-free. Premium costs do not factor in zip code location which can decrease or increase prices considerably.

Looking at the data, you can conclude that makes and models like the Honda Accord, Honda CR-V, Hyundai Elantra, Ford Escape, and Toyota Prius are a few of the most affordable vehicles to insure for new drivers. The price for an auto insurance policy will be more expensive because there is more liability exposure for first-time drivers, but in general those particular vehicles will have the cheapest car insurance rates possible.

The chart below demonstrates how deductibles can raise or lower insurance rates when searching for cheap insurance for first-time drivers. The premium estimates are based on a single male driver, comp and collision included, and no discounts are taken into consideration.

The chart above illustrates that a 40-year-old driver could lower their car insurance rates by $230 a year by increasing from a $100 deductible up to a $500 deductible, or save $348 by selecting a $1,000 deductible. Young drivers, like the 20-year-old category, could shave $756 or even more just by using higher deductibles. When insureds make the decision to increase the deductibles on their policy, it is a good idea to have additional funds in a savings account to enable you to cover the extra out-of-pocket expense, which is the one shortcoming of high deductibles.

Liability only or full coverage

Lowering the price of auto insurance is important to most vehicle owners, and one great way to reduce the cost of insurance for first-time drivers is to only buy liability coverage. The example below visualizes the comparison of insurance prices with and without physical damage coverage, medical payments, and uninsured/under-insured motorist coverage. The information is based on no claims or violations, $100 deductibles, single status, and no discounts are taken into consideration.

Averaged for all ages 20 through 70, comp and collision coverage costs an additional $1,613 per year more than just buying liability insurance. That brings up the question if you should buy full coverage at all. There isn’t a steadfast formula for dropping physical damage coverage, but there is a guideline you can use. If the annual cost of your full coverage insurance is about 10% or more of replacement cost minus your deductible, then it might be time to buy liability only.

There are some situations where removing full coverage is not a good idea. If you haven’t paid off your loan, you have to carry full coverage in order to satisfy the requirements of the loan. Also, if your finances do not allow you to purchase a different vehicle if your current one is totaled, you should not drop full coverage.

Impact of careless driving on auto insurance rates

The best way to score cheap auto insurance rates for new drivers is to drive safely and have a clean driving record. The example below highlights how speeding tickets and at-fault fender-benders influence insurance premiums for each age group. The price estimates are based on a single male driver, full physical damage coverage, $100 deductibles, and no policy discounts are applied.

The chart shows that the average cost of a car insurance policy per year with no accidents and a clean driving record is $1,613. Add in two speeding tickets and the average cost rises to $2,140, an increase of $527 each year. Now throw in one accident along with the two speeding tickets and the yearly cost of auto insurance for first-time drivers increases to an average of $2,667. That’s an increase of $1,054, or $88 per month, just for a couple of infractions!

Here’s why you should compare rates often

Indianapolis auto insurance rates are impacted by many factors which can substantially decrease or increase the cost of your policy. Simply getting older, increasing deductibles, or getting a reckless driving citation can cause premium changes that can make some companies cheaper than competitors.

In addition, insurance companies modify rates as often as every three months to reflect underwriting profits or losses. Significantly higher losses may cause more expensive prices, while lower claims may result in cheaper Indianapolis car insurance rates.

The chart below shows the cheapest car insurance in Indianapolis, IN for a 45-year-old female driver with a clean driving record, no accidents, and a good credit rating. When quoting prices based on her current risk factors, Travelers has the best car insurance rates in Indianapolis at $724 a year. This is $516 less than the average premium paid by Indiana drivers of $1,240. Cincinnati Insurance, USAA, Erie, and Western Reserve are the rest of the top five cheapest Indianapolis, IN auto insurance companies.

The example below compares rates after we give the driver in the first example a chargeable claim, a lower credit rating, and a blemish on her driving record. Due to the fact that every insurance company has a unique approach for determining rates, comparing insurance quotes may result in a new list of the cheapest Indianapolis car insurance companies as shown below.

The Hartford now has the lowest car insurance rate in Indianapolis with Auto-Owners, USAA, State Farm, and Utica National also having competitive pricing. This example shows why it is critical to perform an extensive rate comparison to get affordable car insurance rates for first-time drivers.

Insurance prices are made up of many different factors and can increase or decrease at any time, so the cheapest option six months ago may now be wasting a lot of money.