Best Car Insurance for Bad Credit
Credit is a legal rating factor for auto insurance in 46 of 50 states. In those 46 states, a credit-based insurance score at or below the sub-prime threshold can roughly double your car insurance premium, often by more than the surcharge from a DUI. The exception states are California, Hawaii, Massachusetts, and Michigan: all four prohibit credit as a rating factor outright. In the 46 states where credit matters, the five carriers below tend to lead on affordability for a low-credit profile without pushing you into the non-standard market.
Our shortlist
| Carrier | Featured for | Why it fits | Caveat |
|---|---|---|---|
| Mercury | Low credit score in CA, AZ, FL, GA, IL, NJ, NV, NY, OK, TX, VA | Published aggregator benchmarks place Mercury roughly 35 percent below industry average for the low-credit tier. California budget-value specialist with 11-state independent-agent footprint. | A (Excellent) AM Best after the February 2026 affirmation with the outlook revised to Stable. California wildfire exposure is the biggest tail risk in the file. |
| USAA | Military-affiliated shopper with any credit score | USAA de-emphasizes credit relative to the market in most states where credit is a factor, and does not score it at all in CA/HI/MA/MI. Consistently below-national-average full coverage for the eligible group. | Closed membership (military-family eligibility). |
| State Farm | Credit-sensitive shopper who wants a local agent | State Farm uses credit as a factor but weights it less aggressively than most direct carriers. Household bundling discounts can offset a low-credit surcharge for a shopper carrying homeowners or renters together. | November 2025 AM Best downgrade to A+ from A++. Still A+ Superior; worth noting during the shopping conversation. |
| GEICO | Direct-channel shopper, mid-tier credit | Direct pricing with a large discount menu that can offset a mid-tier credit surcharge. DriveEasy telematics is a path to further savings if your driving data is favorable. | DriveEasy is a two-way program (can raise the rate). Verify the credit-tier impact on your actual quote; GEICO is credit-sensitive in several states. |
| American Family | 19-state captive-agent footprint shopper | KnowYourDrive telematics is discount-only (cannot raise the rate), useful for a bad-credit shopper who wants a safe way to earn more off. September 2025 AM Best affirmation. | 19-state captive-agent footprint. Not available everywhere. |
Why a bad-credit shopper almost never needs a non-standard specialist
Non-standard carriers (Dairyland, The General, Bristol West, Kemper, National General) write high-risk business and charge accordingly. If your record is clean, your credit alone is not high-risk; it just raises your mainstream-market premium. The right move is to shop the mainstream carriers that de-emphasize credit (above), not to jump to the non-standard shortlist. If you ALSO have an SR-22 requirement, a recent DUI, or multiple at-fault accidents, see our best for high-risk drivers page instead.
States where credit cannot be used
- California: Proposition 103 restricts auto insurance to three mandatory factors (driving safety record, miles driven, years of driving experience). Credit is not used.
- Hawaii: state statute prohibits credit as a rating factor.
- Massachusetts: credit cannot be used.
- Michigan: credit cannot be used as of a 2019 reform.
In these four states, a low credit score does not raise your car insurance premium at all. The shortlist above still applies to the specific state footprints each carrier covers; the credit-advantaged carriers are useful because they generalize credit-insensitivity to states that don't require it.
Related reading
- How insurers calculate rates
- Cheapest car insurance (ranked)
- Average car insurance by age
- Mercury review
Sources
- CNBC Select: Best car insurance for bad credit.
- MoneyGeek: Credit-based car insurance pricing study 2026.
- California Prop 103 (CIC 1861 et seq.); HI, MA, MI insurance code.
- Carrier filings reviewed in-state for Mercury, USAA, State Farm, GEICO, American Family.