Car insurance in Memphis: Cheapest insurance and average rates

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Car insurance in Memphis costs an average of $2,161 for an annual full coverage policy or $180 monthly. But some companies offer better rates than others. In 2024, USAA offers the cheapest full coverage car insurance policy at $1,336 per year.

If you live in Memphis, car insurance will likely take a big bite out of your budget. For most drivers, seeking out the cheapest option is critical. We explore the most affordable options.

How to find the best car insurance in Memphis

If you want to find the best car insurance option in Memphis, you’ll need to shop around. When you get quotes from at least three different car insurance companies, you can compare costs to find the most affordable option for your situation. Before committing to a policy, ask the insurer if you qualify for additional discounts to lower your costs. 

Cheapest car insurance company in Memphis

USAA offers the cheapest car insurance coverage in Memphis, with an average annual rate of $342 for a policy that meets the state’s minimum coverage requirements. However, USAA only offers coverage to individuals with qualifying military connections and their family members. 

If you don’t have a military connection, Tennesse Farmers offers another relatively affordable option with average rates of $1,666 for a full coverage policy. 

Explore the other cheap car insurance options in Memphis in the table below. 

Average annual rates from the largest U.S. insurers in Memphis

How much is car insurance in Memphis per month?

Since every driver has a unique situation, car insurance costs vary from driver to driver. But on average, Memphis drivers pay $180 per month for full-coverage car insurance. A minimum coverage car insurance policy costs an average of $51 per month. 

The table below breaks down average car insurance premiums by insurance company and coverage level.

Monthly rates for car insurance in Memphis, TN 

How do rates in Memphis compare to other large cities in the U.S.?

Car insurance companies take many factors into consideration when determining your auto insurance premiums. In general, urban drivers in large cities pay more for car insurance than drivers in rural areas. That’s because big cities tend to have higher rates of vandalism, theft, and accidents, all of which push car insurance costs higher. 

James Brau, professor of finance at Brigham Young University, says that the more risk the insurance company must bear, the higher the premium they must charge to stay in business and make a profit. 

“Large cities tend to present more risk to the insurance companies than rural areas. Large cities have more people, more cars and higher chances of getting in wrecks or having other damage done to vehicles,” Brau says. “As such, insurance firms must charge higher premiums in cities. Cities that are relatively more dangerous, in turn, must charge higher premiums than cities that are not as risky. Insurance companies study damage losses per metropolitan area and assign premiums depending on the number of wrecks in an area.”

See how much you can expect to pay for car insurance in several major U.S. cities in the table below.

Here’s what you need to know when driving in Memphis

Driving in Memphis isn’t always a smooth cruise through the walk. Here’s what to know about driving in Memphis for a smooth and safe experience. 

• Rush hour runs from 7-9 a.m. and 4-7 p.m. If possible, avoid the roads during these times. 
• While you might know where you are going, use a map app to help you skip any unnecessary traffic. 

As you navigate the city, keep these rules in mind:

• You cannot drive so slowly on a road that it unnecessarily impedes other traffic. 
• You cannot hold anyone else, an adult or minor, in your lap while driving in the city.
• Downtown is made of one-way streets, so be mindful of driving the wrong way.
•  North Parkway East, East Parkway, East Parkway South, South Parkway and South Parkway West are all different and may intersect.
• Call 511 for traffic updates from the Tennessee Department of Transportation.

How much car insurance do I need in Memphis?

Drivers in Memphis must carry a minimum amount of car insurance. Below is a breakdown of the state’s minimum auto insurance requirements:

• $25,000 in bodily injury per for a person involved in an accident 
• $50,000 for bodily injury for two or more people in an accident
• $25,000 in property damage coverage per accident

You’ll need an auto insurance policy with these minimum coverage requirements. But depending on your situation, you may need more insurance coverage. For example, drivers who want help repairing or replacing their own vehicle after an incident might want collision and comprehensive coverage. 

Average cost of car insurance in Memphis

Drivers in Memphis pay an average of $616 for a state minimum coverage policy. However, drivers who want more financial protection pay an average of $2,161 for a full coverage policy. 

In contrast to the national average cost of $1,895 for a full coverage policy, Memphis drivers pay significantly more. The average cost of a full coverage policy in the state of Tennessee is $1,667 per year, which means drivers in Memphis also pay more than drivers around the state. 

Annual average rates in Memphis for state minimum coverage and full coverage

How much does car insurance in Memphis cost with violations?

Car insurance costs often increase after you receive a traffic violation. You should expect to pay more for car insurance if you receive a violation in the form of a speeding ticket, at-fault accident, or DUI conviction. 

For example, Memphis drivers see their rates increase by an average of 56% after an accident. If you are caught speeding, that ticket could push your car insurance rates up by an average of  37%. DUIs also lead to higher costs – a 70% increase – and bad credit increasing rates even more – the average rate increased by 121%. 

See rate increases in Memphis in the table below by violation.

Cheapest car insurance in Memphis by age

Car insurance for teens in Memphis is very expensive – the annual rate for an 18-year-old is $6,140 per year for a full coverage policy. Rates start to head down at age 25 and back up in your late 60s.

Annual rates for state minimum and full coverage car insurance in Memphis by age

Compare auto insurance rates in Memphis by ZIP code 

Where you live within Memphis also has an impact on your car insurance costs. In Memphis, the cheapest ZIP codes for car insurance are 38016, 38018 and 38119. In contrast, the most expensive are 38118, 38116, and 38127. 

See the tables below for the cheapest and most expensive ZIP codes in Memphis. 

Cheapest annual car insurance rates in Memphis, by ZIP code

Most expensive annual car insurance rates in Memphis, by ZIP code 

Our recommendations: Car insurance for drivers in Memphis

On average, Memphis drivers get the cheapest coverage by purchasing a policy with USAA or Tennessee Farmers. But, the cheapest insurer for you will vary based on the details of your unique situation.

It’s worth noting that purchasing coverage based on pricing alone can be a mistake. A cheap policy isn’t worth much if it does not include the coverage you want and need. 

So, shop around and gather quotes from several insurance companies. This is the best way to get the coverage you need at the best price. 

A full coverage insurance policy with liability limits of 100/300/100 is the best option for most drivers. Consider increasing your liability limits as you accumulate wealth and your net worth increases. Purchasing as much car insurance as you can afford will give you peace of mind as you navigate the roads of Memphis. 

What our expert says

Q: Why do insurance rates vary from city to city?

Dr. James BrauJoel C. Peterson Professor of Finance Brigham Young University

“Large cities tend to present more risk to the insurance companies than rural areas. Large cities have more people, more cars and higher chances of getting in wrecks or having other damage done to vehicles. As such, insurance firms must charge higher premiums in cities. Cities that are relatively more dangerous, in turn, must charge higher premiums than cities that are not as risky. Insurance companies study damage losses per metropolitan area and assign premiums depending on the number of wrecks in an area.”

Resources & Methodology

Methodology

In 2024, Insure.com commissioned Quadrant Information Services to pull rates for a 40-year-old who has a 12-mile commute and drives a 2023 Honda Accord LX 10k miles annually. The hypothetical driver has full coverage, carrying policy limits of 100/300/100 with $500 deductibles for comprehensive and collision coverages. We analyzed 51,088,003 insurance quotes from 167 companies across 34,588 ZIP codes in every state and Washington, D.C.

Sarah Sharkey

Contributing Researcher

 

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Sarah Sharkey is a personal finance writer with a master’s degree in management from the Hough School of Business at the University of Florida. She enjoys helping readers find money solutions that work. She has written for numerous personal-finance publications including Money Under 30 and The College Investor.