Price: It’s the single most important factor for a lot of car insurance shoppers. Choosing a policy based on rates alone could cost far more out of pocket when filing a claim, however, and, statistically speaking, that will happen to each driver at least once every 18 years. It pays to get the right amount of coverage, whether it’s the cheapest package or not.
The best auto insurance companies have more than just competitive prices; they also offer versatile coverage options, superior customer service, a solid financial report, and an excellent shopping experience. I researched all of those factors and discovered that only four of the nation’s biggest insurers impressed me enough that I would recommend them to family and friends.
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Best Car Insurance Companies: Summed Up
|Car Insurance Companies||Best For…|
|State Farm||Customer Service and Interaction|
|The Hartford||Policy Options|
|USAA||Members of the Military|
How I Picked the Best Car Insurance Companies
First, I conducted an in-depth analysis of 15 auto insurance providers. I gathered data on 86 different features (like a 24/7 claims center or discounts for electric vehicles), organized them into 12 categories, and scored each company on a 100-point scale. Below are the categories I used, along with the weight each one was given in the test.
Next I incorporated learnings from auto experts, insured drivers, and third-party studies into my evaluation and calculated the final scores. I organized this research into three distinct categories, which are outlined below.
- Claims and Price Satisfaction: I looked at J.D. Power’s 2014 Auto Claims Satisfaction Reports, Insure.com’s Best Car Insurance Companies for 2014, and Consumer Reports’ 2014 Car Insurance Ratings to get a bird’s-eye view of the industry across the nation. I also conducted a survey of 100 insured drivers who had filed a claim within the past 12 months.
- Ease of Shopping: I applied for quotes from over 15 auto insurance companies to evaluate the shopping experience. I also considered J.D. Power’s 2014 Auto Insurance Purchase Experience Ratings, which asked customers about their personal take on local agents, call-center representatives, and websites.
- Financial Strength Ratings: I used A.M. Best to gauge financial stability. Any company with a “B” grade or below is considered vulnerable, so I chose companies with an “A-” or above.
The Best Car Insurance Companies of 2016
Amica: Best Overall Car Insurance Company
Amica was the strongest company overall in my research, and ranked number two in J.D. Power’s 2015 customer satisfaction report — that means out of 11,469 surveyed drivers, it had the second highest satisfaction rating among more than 20 different companies. It also received the highest Consumer Reports rating among auto insurance providers. Consumer Reports even noted that an overwhelming number of customers reported “relatively few” problems during the claims process.
- A high J.D. Power satisfaction rating: Amica received a perfect score in 4 out of 7 categories in J.D. Power’s 2015 auto insurance study.
- High financial stability ratings: Amica boasts a “Superior” financial stability rating from A.M. Best, which is the highest rating available.
- No repair facility restrictions: Unlike most every other insurer, Amica has zero restrictions on which body shop you use for repairs.
- “Platinum Choice” coverage: Amica offers an additional tier of coverage called Platinum Choice, which costs more, but includes identity fraud monitoring, full glass coverage, prestige rental coverage, and rewards for good driving.
- Best array of coverages: Amica offers the most driver and vehicle coverages of all my top recommendations. Its list includes GAP insurance and interior vehicle coverage, which aren’t offered by State Farm, The Hartford, or USAA.
- Quote process is less than desirable: Whether you start online or over the phone, you will eventually wind up on the phone to get an official quote — that can tack an extra 20 to 30 minutes to the process.
- Fewer driver discount opportunities: Amica is missing a few key driver discounts, including pre-pay, low mileage, and military discounts. Consequently, it scored only 46 out of 100 in my driver discount evaluation.
- Few online resources: There are a few FAQs on the site, but Amica lacks in-depth online materials to help customers get a complete grasp on their purchases without having to talk to someone. Additionally, some policy changes require direct assistance from an Amica agent, which can be time-consuming.
State Farm: Best Car Insurance Company for Customer Service and Interaction
State Farm is the largest car insurance company in the nation, per Insurance Journal in 2016. Fortunately, it’s also one of the best — especially when it comes to the customer service experience. In 2015, State Farm received high praise from J.D. Power for its service interaction and claims handling. And of all the insured drivers I surveyed, it received the most positive remarks by far.
It is incredibly easy to get in touch with State Farm. You can call one of the company’s 18,000 agents, go online, or even send a picture of your damaged car with your smartphone using the Pocket Agent mobile app. Compare that to Amica, which doesn’t allow you to connect with an agent via an app, or file a claim through an agent. State Farm also gets high marks for a pain-free shopping experience that lets prospective customers call their local agent or chat with a representative online if they have any questions.
- Superior claims handling: No other insurer makes it easier to file a claim — a fact corroborated by its high service rating, 18,000 agents nationwide, and excellent mobile app. Sure, most other auto insurers offer the basic trifecta of phone, app, and email contact to agents, but State Farm’s is the easiest to use by far.
- Great financial standing: State Farm has an A.M. Best outlook of stable, and a “Superior” overall rating — the highest given.
- Best online quote tool: Out of all the competition, State Farm has the simplest online quote tool. In less than five minutes, it’ll guide you completely through the process, replete with thorough examples of coverage options.
- Missing a few common driver discounts: Like Amica, State Farm lacks two extremely common discounts: pay-in-full, and automatic pay. These two discounts don’t save a ton of money, but are definitely nice options to have — and are offered by my third pick, The Hartford.
- Lacks a couple of important coverages: Unlike its competitors, State Farm doesn’t offer stacked uninsured motorist or new car replacement coverages. That could be a deal breaker for someone who lives in a state with an incredibly high rate of uninsured drivers.
The Hartford: Best Car Insurance Company for Policy Options
The Hartford is only the nation’s 11th largest insurer, but it still packs a punch. In fact, it had the highest score in my 12-category feature evaluation (92 out of 100). It also offers a wide range of policy options and benefits (including rates based on how much you actually drive your car and a new car replacement program for cars totaled shortly after purchase) and was the only insurer to score a perfect 100 in my vehicle-discount evaluation.
- Mechanical breakdown coverage: Mechanical breakdown insurance helps cover the cost of repairs that aren’t covered by your car’s warranty. The Hartford is the only one of my top picks that includes this coverage.
- Useful policy benefits: The company provides not only a solid set of coverages, but also a great selection of policy benefits. For instance, frequent travelers will appreciate The Hartford’s towing and roadside assistance programs.
- Excellent purchase experience: The Hartford is one of two national providers to receive a perfect “Overall Purchase Experience” score from J.D. Power.
- Less-than-average claims satisfaction: The Hartford received a perfect score in my claims management evaluation, but according to J.D. Power, customers are still less than satisfied — it received only a 2-star rating for service interaction.
- Fewest online educational resources: The Hartford offers the fewest online learning materials among this field of competitors.
USAA: Best Car Insurance Company for Members of the Military
Throughout my research, I found that the company’s stellar reputation holds true. If you are a member of the US armed forces, or are related to one, there is no better option than USAA.
It is one of the three highest-rated automotive insurers in the country. The only downside is its limited availability: USAA only services the immediate families of active and former members of the military. Given those restrictions, the quote process is a bit more intense compared to its competitors, but that’s a small price to pay for its exemplary service.
- Rated no. 1 nationally for purchase experience: USAA received the only perfect score in J.D. Power’s 2016 report.
- Solid financial stability: A.M. Best gives USAA the highest possible stability rating: “Superior.”
- Membership restrictions: USAA is only available to members of the military and their immediate family.
- Missing three key vehicle coverages: USAA doesn’t offer GAP insurance, interior vehicle coverage, or new car replacement coverage.
Other Car Insurance Companies to Consider
Progressive is worth noting due to its variety of discounts and special coverages that could shave a decent amount of green off your monthly bill. For example, the Snapshot tool allows Progressive to reward you based upon your driving habits. Have an anti-theft device? There’s a discount for that too. The company also offers pet injury coverage — which is included with collision, and comes standard in most states. However, Progressive’s scores across the board were only average, and I couldn’t justify recommending it over my top picks. And, despite what Flo, Progressive’s famous, peppy insurance cashier, would lead you to believe, its mobile apps ratings average out to just under 3 out of 5 stars.
If you live in the South, Midwest, or Mid-Atlantic regions, Erie Insurance is worth your consideration. Erie has consistently received high marks from J.D. Power and Consumer Reports, but didn’t make it into my top four recommendations due to limited availability — it only serves residents in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and certain parts of DC.
Outside of that, Erie is one of the best commercial auto insurers, offering policies that come standard with coverage for road service, lawyer fees, and loss of earnings. It also has particularly comprehensive coverage options that include extras such as money toward rental cars after a crash (this is usually an add-on policy with most insurers).
Auto-Owners Insurance is available in 26 states located primarily in the South and Midwest. It uses an agent-only model that promotes customer relationships, so if you prefer talking to a human being, Auto-Owners is a great choice. The company also scored a nearly perfect score in J.D. Power’s 2015 satisfaction report, falling short only in the realm of its rental car experience.
States Serviced by Auto-Owners:
Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, Wisconsin
Choosing the Right Amount of Coverage
Let’s say I live in Florida and cause an accident that injures another person to the tune of $40,000. If I only have the state’s minimum bodily injury protection ($10,000 per person, $20,000 per accident), I’d be responsible for the remaining $30,000. But, if I had purchased more than Florida’s minimum — say $50,000 per person and $100,000 per accident — I wouldn’t have to pay a single dime out of pocket.
Sure, upgraded coverage means a higher monthly premium. But which would you rather do: Pay an extra $80 a month or wind up owing a lump sum of $30,000 out of pocket? It would take an accident-free 30 years to spend the same amount on the extra coverage. And remember: statistically speaking, you are going to get in a wreck every 18 years. Hopefully, it’s nothing more than a fender bender, but if the worst should happen, you’ll appreciate being fully covered.
That’s why it’s incredibly important to understand what type of coverages you need, and how much coverage you need, before you start shopping for a policy. And in the same vein, it’s also crucial to compare rates that include more than your state’s minimum required coverages (which you can find online at your state’s DMV). You do not want to be the victim of a serious accident only to find out after the fact that you’re underinsured.
Below is a comparison of the coverages offered by my top four auto insurance companies, and a breakdown of each type of coverage.
|Vehicle and Policy Coverages||Amica||State Farm||The Hartford||USAA|
|Bodily Injury Liability||✓||✓||✓||✓|
|Personal Injury Protection||✓||✓||✓||✓|
|Property Damage Liability||✓||✓||✓||✓|
|Rental Car Coverage||✓||✓||✓||✓|
|Stacked Uninsured Motorist Coverage||✓||X||✓||✓|
|Uninsured Motorist Property Damage Coverage||✓||✓||✓||✓|
|Pet Injury Coverage||X||X||X||X|
|Interior Vehicle Coverage||✓||X||X||X|
|New Car Replacement||✓||X||✓||X|
Types of Auto Insurance Coverages
Bodily Injury Liability: Coverage against bodily injuries to others in an accident that is your fault.
Personal Injury Protection: Coverage for injuries sustained by the driver or any passengers, often including medical bills and lost wages.
Property Damage Liability: Coverage against property damage to another party in an accident that is your fault.
Rental Car Coverage: Coverage for your rental car if it is damaged or stolen.
Stacked Uninsured Motorist Coverage: Coverage that allows you to combine or “stack” the individual limits of coverage on multiple insured vehicles in the same household.
Uninsured Motorist Property Damage Coverage: Coverage that protects against property damage caused by an uninsured or underinsured motorist.
Pet Injury Coverage: Coverage for injuries to your pets sustained in an auto accident.
Collision: Coverage against any damage resulting from a collision.
Comprehensive: Coverage against any non-collision vehicle damage including fire, theft, or vandalism.
GAP Insurance: Coverage that pays the difference between the actual value of a totaled car and the balance remaining on an auto loan.
Interior Vehicle Coverage: Coverage of personal belongings inside of the car, like your clothes, sound system, or purse.
New Car Replacement: Coverage that will replace a totaled car with a brand-new version if it is less than one year old.
You should shop for a policy every two years
Contrary to popular belief, car insurance companies don’t just calculate rates on risk alone. It goes much deeper than that. Welcome to the world of “price optimization,” which is the practice of setting rates based upon how much insurers think customers are comfortable paying. Simply put, it’s a way to maximize profit.
In 2013, Earnix found that 45 percent of larger insurance companies analyze a ridiculous amount of customers’ personal data (like social media posts, credit scores, and web shopping habits). Then, they churn the data through a proprietary algorithm that estimates how likely you are to shop around. By doing so, they can charge you based upon a perception of your level of comfort, raise profit margins, and do it all without causing you to lift an eyebrow.
The best way to prevent falling victim to this practice is to shop for a new policy every one to two years. Companies are aware of your online activity, so the more quotes you get, the less likely you are to be tagged as someone who won’t jump ship for a better deal. Plus, it helps you find a policy rate that reflects you as a person and isn’t based on predictive analytics.
Should I use an agent or go online?
Depending on which companies you consider, you may have to decide whether to do business with an insurance agent or purchase a policy online. If you value face-to-face relationships and personal service, it’s hard to beat an agent. But all agents aren’t created equal. Some are “captive,” meaning they sell car insurance for only one company. Others are “independent,” meaning they can sell car insurance for multiple companies. Here are a few things you should consider for each scenario.
Using Captive Agents
The biggest benefit to captive agents is that many aren’t primarily motivated by commission. That means they have less of a reason to “sell you” and more of a reason to spend quality time educating you. Going with a captive agent also makes sense if you’re already committed to a particular company. Additionally, they will know their company’s policies and coverages from top to bottom.
Using Independent Agents
Independent agents have special access with several companies and help you to find the best rate available. However, some companies pay higher commission than others, and that means you may face pressure to choose a particular company or coverage plan.
During my research, I interacted with several independent agents who refused to give me a single detail about higher-priced plans. Despite my persistence, I was repeatedly asked, “Why would you want to consider something that costs more?” and did not get the information I wanted. On the flip side, if your rates go up after committing to a policy, independent agents are best-suited to help you negotiate a lower price.
Some companies allow customers to do business directly online. If you’re a self-starter, this could very well be the most convenient option. And in some cases, it may also be the cheapest option.
The biggest downside to buying a policy on your own is the risk of underinsuring yourself. Buying the wrong policy, or a policy that doesn’t have state-mandated coverage levels, could cost you a pretty penny if the worst should happen.
Remember: The cheapest auto insurance is not necessarily the best. My advice is that you first determine the exact coverages that you need, and then shop around for the most affordable policy. And the best place to start your search is with The Simple Dollar’s quote tool at the top of the page. Just type in your ZIP code to shop and compare rates from my top recommendations (State Farm, USAA, Amica, The Hartford) and more.
Find the Best Car Insurance Rates
Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.