You probably came across GEICO being described as an inexpensive option when you were looking for a car insurance policy. But is GEICO in fact one of the cheapest insurers for you?
That’s correct, but none of the insurance companies give the lowest price to all drivers. GEICO’s quote will depend on different factors such as the state in which you live, your driving record, the type of vehicle you have, the coverage that you choose, the deductible, and other personal details. The only sure way of knowing whether GEICO is a cheap option for you is to compare its actual quote with the quotes obtained from other insurers who provide similar coverage.
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Why GEICO Can Be Relatively Affordable
GEICO provides a wide range of discounts that can reduce the premium for customers who are eligible. The availability of these discounts will depend on the state and the particular policy for reasons including having a clean driving record, owning more than one vehicle, getting good grades, fitting safety equipment into the vehicle, finishing a defensive driving course, paying the full amount, arranging automatic payments, opting for paperless billing, and being a member of certain affiliations.
For instance, GEICO provides a possible discount of as much as 22% to drivers who meet its clean-driving conditions, and up to 25% in the case of certain multi-vehicle policies. It must be emphasised that these figures refer to the highest possible savings rather than to guarantees, and that the discount will depend on the state and on the individual circumstances.
GEICO offers the DriveEasy scheme in some cases; the programme works out possible savings by taking into account details of your driving behaviour, although the criteria for joining the scheme and the exact nature of the programme vary from state to state.
A further consideration is the deductible; this is the sum which you usually pay from your own pocket before some insurance coverage comes into effect. Although selecting a higher deductible could lead to a lower premium, it also means that you will have to pay more out of pocket following a covered claim.
A low quote from GEICO might be the result of a combination of competitive base prices, discounts, and the type of coverage and deductible that has been selected, not simply because GEICO charges all its customers less. That is the reason it’s important to compare the quote with similar coverage from other insurers.
What is included in GEICO car insurance?
GEICO has a range of auto insurance coverage options, but the exact choices and requirements will depend on the state and the policy.
Liability insurance normally pays for the costs of injuries or damage to other people’s property that you cause in an accident for which you are to blame. The amount that is legally required will vary a great deal depending on where you live since each state sets its own minimum liability requirements.
Collision coverage can help pay for damage to your vehicle caused by a covered collision.
Generally, comprehensive coverage includes certain types of damage to your vehicle that result from non-collision events, such as approved theft, weather-related damage, or other covered events.
Coverage for uninsured and underinsured motorists can protect you in the event of an accident with a driver who has no insurance or whose insurance is insufficient, provided that the terms of the policy and state requirements are met.
There are also medical payments coverage, rental reimbursement, and emergency roadside assistance available. The terms and availability of these coverages vary by state and policy.
An important point is that ‘full coverage’ is not a standard type of insurance policy. However, people often use the term to refer to a grouping of liability, collision, and comprehensive coverage; the real level of protection will depend on the specific policy you buy.
Is GEICO really cheaper than other insurance companies?
There is not a single solution which can be applied in all situations.
Auto insurance pricing is highly individualised. According to the National Association of Insurance Commissioners (NAIC), insurers take into account elements such as location, age, driving experience, driving record, claims history, vehicle type, vehicle use, miles driven, previous insurance coverage, credit history, where permitted, selected coverage, and deductibles.
It therefore follows that two drivers who live in the same city could get very different quotes from GEICO, and that GEICO might offer a cheaper rate to one driver while a different insurance company provides a lower price to another driver. Hence, the answer varies according to the individual driver and the quote in question.
Consider two hypothetical drivers:
- Driver A has a perfect record, is eligible for a number of discounts, drives a car of relatively low cost for the purposes of insurance, and has chosen a higher deductible.
- Driver B has recent violations, drives a more expensive car, and is requesting lower deductibles and higher coverage limits.
GEICO could offer these drivers very different rates, and the insurance company with the lowest rate for Driver A might not have the lowest rate for Driver B.
Which is why it is misleading to evaluate companies solely on their advertised “cheap” rates.
What makes a GEICO quote cost more?
The fact that a person has GEICO doesn’t guarantee that their car insurance will be cheap.
Your premium could rise as a result of various factors including where you live, your driving record, the type of vehicle you have, the level of coverage, the deductible, and other underwriting considerations. Since insurance requirements and pricing factors vary from state to state, moving to a different state may lead to a change in the price of your insurance. The kind of coverage you choose is also important; a policy that includes higher liability limits together with comprehensive and collision coverage will generally cost a different amount than a simple policy that just meets the state’s minimum requirements.
It is important when you are comparing insurance policies. For instance, a policy that costs $100 less does not have to be the better value if it offers considerably less coverage.
GEICO Discounts Can Help Lower the Price
One of the main reasons GEICO may be competitive for certain drivers is its discounts.
Depending on eligibility and location, GEICO lists discounts for categories including:
- Clean driving records
- Multiple vehicles
- Good students
- Defensive driving
- Vehicle safety equipment
- Certain professional or organisational affiliations
- Paying the premium in full
- Automatic payments
- Paperless billing
- Bundling certain insurance policies
It is not the case that all discounts are available everywhere, and certain discounts have specific eligibility requirements.
For instance, a person who is insuring two cars with GEICO could get a multi-vehicle discount, and a student with satisfactory grades might be eligible for a good-student discount; in both cases the cost savings could make GEICO more competitive than it would be if the discounts were not available.
What matters is comparing the final premium after taking into account the eligible discounts, rather than assuming that a company is cheaper just because it is advertising a certain discount; this way, the discussion about the discount remains linked to the actual quote and the full comparison.
Regarding GEICO’s claim forgiveness?
GEICO also offers Claim Forgiveness in some states. The forgiveness feature is intended to prevent the driver’s premium from going up as a result of a first qualifying claim. It can be obtained or purchased based on one’s eligibility and location. GEICO states that this benefit relates to the first qualifying claim and is governed by the policy terms and state regulations; it is not offered in California, Connecticut, or Massachusetts.
It may be useful, but one should not take that as meaning that GEICO will always be the cheaper option. Rather, Claim Forgiveness should be seen as just one element of an insurance policy and have to be evaluated together with the other parts of the quote.
Eligible drivers may be able to reduce their premiums by taking advantage of a number of available discounts.
- You can get quotes and manage policies online.
- Various standard auto insurance coverages and optional protections are available, with the type of coverage depending on the state and the policy.
- Some drivers may be able to avail themselves of features such as DriveEasy or Claim Forgiveness.
Cons
- It cannot be guaranteed that GEICO will be the cheapest policy for every driver.
- The size of any discount will vary according to the state and on the specific circumstances of the individual.
- A reduced price could be due to lower coverage limits or a higher deductible, so looking at the price on its own might be misleading.
- In all states and through all GEICO companies, not every coverage option and feature is available.
How to Find Out If GEICO Is Cheap for You
The easiest method is to compare the quotes while using the same coverage limits and deductibles.
It is possible that GEICO will quote you a rate of $1,500 a year for a policy which has a $500 collision deductible; another insurer, on the other hand, offers $1,350 but has lower liability limits and a $1,500 deductible. Nevertheless, the second policy is not necessarily the better value.
When comparing, look at:
- Liability limits
- Comprehensive and collision coverage
- Deductibles
- Uninsured/underinsured motorist coverage
- Rental reimbursement
- Roadside assistance
- Available discounts
- The total premium
GEICO advises that you should compare policies on a like-for-like basis and check the minimum coverage requirements of your state before selecting a policy; this recommendation is in line with the comparison criteria mentioned above and ensures that all the sections remain aligned.
Frequently Asked Questions
Is GEICO really one of the cheapest car insurance companies?
GEICO can be competitively priced for some drivers, but it isn’t guaranteed to be the cheapest. Rates depend on the driver, vehicle, location, coverage, deductible, discounts, and other rating factors. Comparing quotes is the best way to find out.
Why has my GEICO quote come out higher than I expected? Compare quotes using the same coverage limits and deductibles, and review the factors that affect your rate to understand why it may be higher than expected.
Your quote could be influenced by a number of factors, including your place of residence, driving record, type of vehicle, the coverage you have chosen, the deductible, your claims history, and other underwriting details. Also, the discounts you receive may differ according to where you live and your eligibility.
Does GEICO offer full coverage?
GEICO offers collision and comprehensive coverages along with liability and other kinds of coverage. Nevertheless, as ‘full coverage’ is not a standard expression in the insurance industry, you should check the exact protections and limits that are included in the policy you are considering.
Can GEICO change its prices after I have moved?
Your premium could change since the insurance requirements, rating factors, and the discounts available may be different for your new address.
Does GEICO offer discounts?
Yes, GEICO does provide a number of discounts, for example those which depend on your driving record, the equipment of your vehicle, the fact that you own more than one car, your student status, the method of payment, and some affiliations. The particular eligibility and the amount of the discount will differ from state to state and according to the individual circumstances.
The Bottom Line
Even though GEICO may be a fairly inexpensive choice for a number of drivers, it would be misleading to claim that it is the cheapest car insurance company in all situations. This is because insurance prices differ from person to person, and so the lowest quote does not always indicate that the policy provides the best value.
When you choose GEICO, obtain a quote and then compare it with those from a number of other insurance companies that provide the same degree of coverage and deductibles. Find out what discounts you are entitled to and then look beyond the quoted price.
That approach will tell you far more about whether GEICO is cheap for you than any national claim about which insurer is cheapest.
