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The Best Car Insurance Companies of 2021
Ease of filing claims, customer service, discounts for such habits as being a good driver or student — these are some of the criteria we look at when choosing the best auto insurance companies on our radar.
The standout was Amica Mutual Group, with its perfect SimpleScore of 5 out of 5, but the others that made our list have their own impressive story to tell, such as State Farm for teen driving and USAA for cost. Bottom line? You’re bound to find an insurance provider you love from our list.
The 10 best car insurance companies of 2021
Using our SimpleScore as well as data from J.D. Power, Consumer Reports and others, we’ve identified the best car insurance companies of 2021.
- Amica Mutual: Great overall car insurance
- American Family: Great car insurance for diminishing deductible
- Geico: Great car insurance for customer support
- Liberty Mutual: Great car insurance for coverage options
- State Farm: Great car insurance for teen driving
- Nationwide: Great car insurance for safe driving
- Farmers: Great car insurance for state-specific discounts
- USAA: Great car insurance for cost
- Allstate: Great car insurance for accessibility
- Progressive: Great car insurance for maximizing savings
|Rank||Company||SimpleScore||Why this insurance company is great|
|1||Amica Mutual Group||5.0||Great overall car insurance|
|2||American Family||4.8||Great car insurance for diminishing deductible|
|3||Geico||4.8||Great car insurance for customer support|
|4||Liberty Mutual||4.8||Great car insurance for coverage options|
|5||State Farm||4.6||Great car insurance for teen driving|
|6||Nationwide||4.5||Great car insurance for safe driving|
|7||Farmers||4.4||Great car insurance for state-specific discounts|
|8||USAA||4.4||Great car insurance for cost|
|9||Allstate||4.4||Great car insurance for accessibility|
|10||Progressive||4.2||Great car insurance for maximizing savings|
Why trust us in finding the best car insurance?
Our research methodology
We’ve created the SimpleScore™ to help you objectively compare products and services here at The Simple Dollar.
Our editorial team:
- Identifies five factors to compare across each brand
- Determines the rating criteria for each factor
- Calculates an average of those five factor scores to get one SimpleScore™
We break down each of these five factors and their rating criteria for our review of the best auto insurance companies of 2021.
Why do some brands have different SimpleScores™ on different pages?
The Simple Dollar also looks at external studies from authoritative sources such as Consumer Reports, the Insurance Information Institute, AM Best and J.D. Power for inspiration.
Best car insurance companies reviewed
Compare 2021 car insurance rates
Make sure when comparing car insurance quotes from different companies you are looking at the same policy type and coverage level. Cheaper quotes could just be a policy with less coverage.
How does the auto industry work?
There are projected to be almost 290 million registered vehicles in the U.S. in 2021, according to Hedges & Company, up from about 287 million in 2020. And the National Highway Traffic Safety Administration estimated there were 6.7 million vehicular accidents in 2018, the most recent available data. That’s a lot of cars and a lot of repairs to keep up with. That’s where insurance comes in.
Auto insurance helps cover car repairs and personal costs when life happens. Whether it’s an accident or pothole, your coverage can help you cover these costs after your deductible. The less your car’s value is, the less you’re likely to pay in premiums — though it will depend heavily on your coverage, state, age and other factors.
What’s factored into auto policies and rates?
Your auto policy and the premium will depend on a few factors. It will also determine whether or not an insurer is a good fit for your car coverage needs. Most policies depend on the following:
Depending on these and other factors, you could pay more or less in car insurance. Think about buying a brand new, high-end car when you turn 21 years old. You’re likely to pay more for the car’s year, make and model. You may also pay more as a young driver with a less established driving record. You’re also likely to pay more if you live in California than your friends in South Carolina are paying. Keep in mind that your policy and premium are unique to your needs, driving record and other personal factors.
What’s happening in the car insurance industry today?
At the start of the pandemic, some insurers offered drivers a reimbursement on their monthly payment to help economically. Policyholders were driving less due to COVID-19 nationwide lockdowns. Allstate offered their drivers a 15% Shelter in Place payback on their premiums for April, May and June. Other providers offered credits toward premiums instead. Since that point, drivers have been on the road less often. If you’re working remotely but still need auto insurance, it may be the perfect time to look into low-mileage auto insurance for extra savings or switch carriers for extra savings. You’ll only pay for the miles you drive, and you’ll still have all the coverage you need.
Guide to finding the best car insurance for you
There’s a lot to know about the car and insurance industries to fully understand how auto insurance works, but we don’t want to bore you with a long history lesson. Here’s what you need to know to help make a well-informed decision about your car insurance.
What makes the best auto insurance companies?
The best auto insurance companies give policyholders flexibility, affordability and simplicity from beginning to end. Whether it’s getting a free quote, paying a monthly premium or filing a claim, today’s top picks are giving customers what they need when they need it most.
Start by looking at a provider’s coverage options. You’ll want an insurer with a number of policies and coverage options to meet your needs. Ask your agent what types of car insurance they offer and if any add-ons are available, including rental car coverage and Roadside Assistance. Many insurers will offer a few options including collision, personal injury and gap coverage.
Switching insurance providers isn’t all about rates. Service matters just as much, if not more. After all, you’ll be working closely with an agent to handle your policy, claims and any other concerns. Take a look at your company’s BBB rating or J.D. Power rating to see what other customers think, and to weigh any pros and cons. You can also give your agent a call for a first-hand customer service experience to ask about claims, coverage, rates and more.
Your auto insurance shouldn’t break the bank. Shop around for the most affordable rates by speaking with agents and getting free quotes online. Be careful when aiming for the lowest rates, though. Cheaper coverage doesn’t always mean it’s the best. You may pay a low monthly price, but the policy could lack the coverage options you need. Make a list of necessary coverages and find the most affordable rate for your needs.
Once you’ve found a premium you’re comfortable with, give the agent a call to get more information on discounts and other ways to lower the cost. You may save money on your rate by bundling home insurance, driving safely or taking a driver’s safety course.
Consider these factors when shopping for car insurance
Check your state requirements: not every state is the same
In nearly all states, drivers are required by law to carry some form of car insurance or proof of financial responsibility. Every state has requirements for the level of insurance and the minimum amount of coverage each driver must have. Use the Insurance Information Institute’s guide to determine the insurance requirements for your state.
After you’ve found what’s the minimum amount of insurance required for your state, you should know if you live in a no-fault or fault state. If you live in a no-fault state, regardless of if an accident is your fault, collision damages and medical expenses will be covered by your insurance company.
We’ve researched state requirements and the best carriers across all 50 states:
What is an at-fault state?
There are two kinds of state laws when it comes to auto insurance:
- No-fault state — This means that drivers file claims with their own insurer for injuries. No-fault state drivers are typically required to carry personal injury protection (PIP) to ensure that you have the adequate coverage to pay for your medical expenses from an accident.
- At-fault state — Also known as a tort state, this means that the person responsible for the accident pays for the damages associated with that accident, including the other driver’s expenses.
Choose the right amount of coverage for you: Full coverage vs minimum
Full coverage annual rates are significantly higher than minimum coverage rates. But an inclusive car insurance policy isn’t something you should opt out of just to save money— especially if there’s a collision. Full coverage typically includes coverage to help pay for damages to your car, while the state minimum, also known as liability insurance, will help cover damages you cause to other people and their car while driving.
|State||Full coverage annual rate||State minimum annual rate|
Even though a cheaper monthly premium might seem attractive, having more than the imposed state minimum will ensure that you’ll pay less out-of-pocket in case there’s an accident.
For example, in a major car accident, an individual’s medical expenses could exceed $15,000, yet that’s the minimum liability limit in some states.
While different states will require different types of coverage, the most basic auto insurance policies include bodily injury liability and property damage liability. Some states also require personal injury protection (PIP) and uninsured motorist coverage. Collision and comprehensive coverage are not required by state laws, but if your car is financed or leased, your lender will likely require it. There are additional coverage options as well, which typically cover things like pet injuries or new car replacement costs, among other expenses. Some examples of common coverage include:
- Bodily injury liability
- Rental car coverage
- Uninsured/underinsured motorist coverage
- Collision insurance
- Comprehensive insurance
- Gap insurance
- New car replacement
- Personal injury protection
- Property damage liability
Understand your deductible and how it affects your premium
A few coverage options will have a deductible –– the amount of money you will be responsible for in the event of a covered loss. Collision and comprehensive coverage will have a deductible, and in some states that offer uninsured motorist property damage, a deductible may apply for this coverage as well.
Deductibles are often $250-$1,000. Generally speaking, the lower the deductible is, the higher your premium.
How to save money on car insurance
Now that we’ve laid out the most important aspects that you should know about car insurance, here are some tips on how to save money on your car insurance policy.
1. Compare car insurance quotes
Risk isn’t the only factor that car insurance companies use to calculate your rate. Many insurers also use “price optimization,” meaning they set rates based on how much customers are willing to pay.
Large insurance companies analyze an enormous amount of customers’ personal data, such as social media posts, credit scores and even your online shopping habits. Then, they run the data through a proprietary algorithm that estimates how likely you are to shop around or just renew your existing policy each year. Shopping around every year or two may help you find cheaper car insurance options. For most car insurance companies, getting a quote is an easy, online process that you can do in minutes. You’ll just need to provide information like your address, vehicle information and driving history.
[ For You: Understanding Auto Insurance Quotes ]
2. Raise your deductible
A higher deductible usually means a lower monthly cost. It may be a better budget option but know that if you get into an accident, you’ll be responsible to pay a larger amount of the damages. Evaluate your risk tolerance and consider talking to an agent about your options.
3. Raise your credit score
A good credit score saves you money on just about every monthly service or bill and car insurance is no exception. If you focus on improving your credit score first, you could save hundreds and thousands of dollars on your annual premium. Look for ways to improve your credit score ahead of shopping.
4. Ask for discounts
If you want a policy with a lot of additional coverage, the end price can feel a little overwhelming. Capitalizing on the discounts providers offer is one way to ease that financial burden. When you’re shopping around, look for discounts that tailor to your needs. Here are some of the common discounts offered by most providers:
- Defensive driving discount
- Good driver discount
- Low mileage discount
- Safe driver discount
- Multi-driver or multi-policy discount
- Student discount
5. Bundle your insurance
Do you pay separate companies or have separate policies for your renters, home or motorcycle insurance? Renter + auto discounts and home + auto discounts are common. Ask your insurance provider if there is a chance you could be saving money each month by bundling separate insurance.
We welcome your feedback on this article and would love to hear about your experience with the car insurance companies we recommend. Contact us at firstname.lastname@example.org with comments or questions.