Turn on your TV for five minutes and you'll probably see a commercial for car insurance -- some more entertaining than the shows they interrupt. The reason there are so many ads is because it's very easy for people to change car insurance companies; and when you do, they want you to remember their jingle, spokesman, woman, or lizard.
And you absolutely should shop around for car insurance. What we've learned in preparing this report is that once a company has you, they're more than happy to raise your rates, a bit here and a bit there, or maybe even quite a bit. They're hoping you won't notice, won't question, or they're relying on inertia -- that you'll just sort of let things slide and stick with the status quo. Car insurance companies also will not check your premiums on a regular basis to see if changes in the industry or pricing algorithm (which happen with surprising frequency) might result in a lower rate if applied to your circumstances. That means you have to do your own homework. At least once a year, at a minimum, experts say, you should get auto insurance quotes. The ideal time to do so is shortly after a birthday, as your age is an important factor in how much you are charged. If you find a lower rate elsewhere, see if your current insurer will match it. Chances are that they will. It costs you absolutely nothing but time, and with the plethora of online quotes sites, it won't take much of that either.
There are a variety of factors that will determine what you pay for car insurance, including where you live, your age, driving history, type of vehicle and your credit score. You may also qualify for various discounts, or benefit from bundling -- that is buying other policies from the same company, such as home, renter's, boat, motorcycle, or life insurance.
The most basic kind of car insurance is liability coverage. If you're at fault in an accident, this pays for the damage you do to others, both bodily and property. All states require licensed car owners to carry some level of liability coverage.
Collision insurance covers the cost to fix your own car after an accident, but may not always be necessary if your car is fully paid for and has a low resale value. You can save money if you can opt out of this, but you can only do so if there's no lien on your car.
Comprehensive insurance covers non-accident-related catastrophes, such as vehicle theft or storm damage. It also covers lesser incidents, such as if a rock flies up and breaks your windshield; however, if your policy has a high deductible, that type of claim might not be worth filing.
Uninsured/underinsured insurance can protect you if you get into an accident with someone who has no insurance -- or not enough -- and lacks the money to pay out of pocket.
Medical and personal-injury insurance can pay for injuries sustained in an accident.
There are many extras you can purchase as well, often for very little, such as reimbursement for a rental car while your vehicle sits in the shop, towing, or roadside assistance.
For good drivers, smaller companies may be a better bet. Policyholders say these companies offer a more personal approach than big insurers, especially if you form a relationship with a local agent, and smaller insurance companies often are rated more highly. However, many smaller insurers only do business in certain states. They may also be pickier about their policyholders, accepting only those with sterling driving records.
If your driving record isn't spotless, big companies are worth a look. National insurance companies typically offer a wider variety of policies, so they can take on riskier drivers -- though your rates will be higher than drivers with a clean record. That last part is especially true of drivers that companies are required to cover under state "assigned risk" programs, which secure insurance coverage for anyone legally eligible to drive.
Drivers in military families have additional options. A handful of companies cater exclusively to active-duty military, veterans and their families. Some insurers also offer coverage options and discounts exclusively for servicemen and women. For instance, companies may offer breaks on rates during deployments, saving you from canceling your insurance and creating a lapse in coverage, which can make getting new insurance tricky.
Comparing auto insurance companies isn't quite like looking at physical products, like vacuums, simply because there are so many variables. Customer reviews aren't easy to come by, and most people only post complaints, not compliments. However, J.D. Power and Associates conducts several large satisfaction surveys that are helpful in choosing the best car insurance companies. ConsumerReports.org has a similar survey-based roundup, rating auto insurance companies on claims satisfaction, price and service. Insure.com is the best, most recently updated source of consumer reviews; and Viewpoints.com has reviews going back several years that also provide a helpful snapshot. The result of our research is a wide range of choices in your car insurance coverage
You won't see any clever commercials touting Amica Mutual on TV, but customers say that the company provides excellent customer service and low-hassle claims service. In fact, customers say the claims service is excellent, from appraisal to payout, which is a relief for those who have had to use it. The company also offers a rental car option, but reviews for that service are not quite as good. However, there are a wide range of options for rental car coverage, so paying more may offer better satisfaction.
Amica Mutual offers policies in every state except Hawaii. Customers are happy with the variety of available plans and discounts, although some say it's pricier than other companies. Most policyholders say premiums are fair, but some report sudden rate hikes and we read some reports of policies going up a bit with each renewal -- an amount that eventually adds up. Amica Mutual may be a bit picky about who they insure and you might need to have a clean or nearly clean driving record in order to land a policy with them.
Another low-profile but highly rated insurer is Auto-Owners Insurance. Coverage is available in only 26 states, but customers say the company offers a smooth claims process and personable service through its extensive network of local agents. Policyholders also say they're mostly happy with premiums and the variety of available discounts, but some complain that plans aren't as flexible as those offered by competitors. Though 24-hour service is available, customers are expected to work with agents directly when they're available, a potential drawback depending on the type of service you prefer.
Like Amica Mutual and Auto-Owners, Erie Insurance typically flies under the radar. Customers report high levels of satisfaction with service and claims experiences. Erie also grabs the top spot in a national survey of customers' car insurance shopping experiences, with its local agents receiving above average marks. In one owner survey, it gets very good ratings for claims processing, price and service satisfaction -- although some say it is pricier than other options. Erie offers some other impressive benefits that most other insurers charge extra for, such as transportation expenses after an accident, travel costs, personal property and locksmith services. In addition, Erie waives your deductible if you are in an accident with another Erie policy holder. However, the big drawback to Erie Insurance is that it only offers coverage in 11 states, mostly the mid-Atlantic and Midwest.
Some of the highest-rated car insurance companies also tend to be pricier than others. If you're on a tight budget, there are a couple of other options that may save you some money. Among those, GEICO stands out in survey after survey for their low cost coverage options. Even people who would like more bells and whistles -- like in-person agents -- say they simply can't find a better rate than GEICO offers. However, in spite of its relatively sparse number of brick-and-mortar offices, GEICO gets top marks for overall customer satisfaction in several auto-insurance consumer surveys. In addition to the standard discounts, GEICO also offers some of the best military and government discounts of any car insurance company. Which makes sense when you consider that GEICO (which stands for Government Employees Insurance Company) was originally created to insure government employees.
GEICO also offers a wide variety of policy options and discounts for non-military members, and the company earns solid financial ratings. While GEICO offers a smattering of local agents -- and they get lackluster reviews -- it does most of its business online and over the phone and the company's phone representatives earn kudos for their solid customer service. Service is also available 24/7.
Progressive is one car insurance company that does better this year than last in owner satisfaction surveys and with experts. It's number three on NerdWallet.com's list of cheap car insurance companies, behind only Geico and State Farm. However, there are quite a few options for discounts and they even provide injury coverage for your pets. Best of all, for those on the tightest of budgets, Progressive has a program called Snapshot that can save you an impressive amount of money on your car insurance -- up to 30 percent -- but only if you're willing to give up some personal privacy. The "snapshot" is a small device you install in your vehicle that records your driving habits for 30 days. During that time, it gathers information from various factors, including when you drive, how much, how you brake, among others, to create an overall picture of your common driving habits. If you meet the safe driver requirements, you can earn up to that 30 percent discount. That could be a significant savings for those on the tightest of budgets. There are other companies that also offer similar tracking programs, but Progressive's was the first, and is reported to be a very good deal by those who have used it.
No matter what insurer they choose, military families should always ask whether they are eligible for any special discounts or policy flexibility. Most companies have some sort of special plan for military members, but some are much more user-friendly than others. For example, some companies require more notice than others before deployment benefits can kick in, and some make it fairly complex to fill out the necessary paperwork.
For the best, most affordable and flexible coverage for military families, check out the highly rated military-only option first: USAA, or the United Services Automobile Association. USAA scores at or near the top of several car insurance customer-satisfaction surveys, with policyholders reporting positive experiences with claims, from the initial appraisal all the way through repair and payout. They also get kudos for value for the money.
USAA car insurance plans are flexible and there are several discounts available, customers say, and not just for being in the military. While it fulfills a niche in the car insurance industry, USAA retains a nationwide reach and strong financial ratings with most major rating agencies. Potential customers should note that USAA only does business online and over the phone, so those who want to build a close relationship with an insurance agent may need to look elsewhere. However, customer service is available 24 hours a day, 7 days a week and USAA's phone representatives get high marks for being helpful and knowledgeable. USAA is also a membership-based insurance company, and members get cash rebates in years when claim payouts are low. Most insurance companies offer only coverage for your money -- if you never make a claim, you never get anything back for that payout.
USAA makes repairs easy, maintaining a list of approved repair shops -- although customers can still opt for their own choice, as required by law. For an additional fee, roadside assistance, rental car and towing coverage are all available. Unlike most insurance companies, USAA works with their own financing network to offer competitive loan rates and discounts on auto purchases for military members.
Another option worth a look for military families is GEICO, our top pick in for cheap car insurance. One of the largest insurers in the country, and, as noted earlier, initially formed as a subset of a larger insurance conglomerate to service government employees, GEICO boasts a special military program that offers lower rates and special policy flexibility for servicemen and women, including an overseas insurance program for those who are touring or stationed abroad and an emergency deployment discount.
Some experts say that military members are actually better off with direct writers, such as USAA or GEICO, rather than agent-based auto insurance for two reasons. First, since military members move a lot, you need to continually sever your ties with one agent in one locality and then find another elsewhere. In addition, military insurance experts point out, agents often earn a commission that may result in higher overall rates for your coverage.
In addition, as with any type of insurance, you may get better rates if you bundle your car, home and life insurance, and both USAA and GEICO, either on their own or in partnership with another company, offer a full range of other types of insurance.
Many of the top insurance companies are pretty picky about who they insure. You may be denied direct coverage for some or all of the following: A poor driving record, a unique, high-performance vehicle, geography (if you live in a high crime area), your age and the amount of driving experience you have.
The good news is that drivers who are in a higher risk category may have the best luck with large companies, and State Farm certainly fits the bill: It's the biggest car insurer in the nation with more than 18 percent of the market, according to Insure.com. Its size means that State Farm can offer a very wide variety of policies and discounts. Those looking for a more personal car-insurance experience shouldn't write off State Farm because it's huge, though; the company has a large network of agents nationwide for face-to-face service and those get great reviews for their knowledgeable and helpful and service. In fact, although direct-service insurance companies can usually offer lower rates, experts say a good agent may be able to maximize your good qualities to help ease your rates down a bit more than an impersonal, online agent would.
State Farm fares better in customer-satisfaction surveys than many of its large competitors, with policyholders reporting solid experiences with claims. State Farm has strong financial ratings, too.
Progressive offers another solid option for risky drivers. It also maintains an extensive network of local agents and offers a wide range of plans and discounts. Financial ratings are solid. Progressive touts its "concierge level" claims service, although customers report decidedly mixed feelings about their experiences.
One more large company worth a look is GEICO. Like State Farm and Progressive, GEICO is big enough to offer enough flexible plans to cover all types of drivers, and it has solid financial ratings.
There are few life events more terrifying than putting the car keys into the hands of your beloved teenaged son or daughter. According to the CDC, motor vehicle crashes are the leading cause of deaths for U.S. teens. However, they also point out that most of these accidents are preventable, and ongoing education in safe driving practices is the way to do so.
That is why we really like Esurance DriveSafe, a teen-oriented safety program we wish was around when we were the nervous parents of newly minted drivers. It's only available to parents who already are insured through Esurance; but it's free to them. The DriveSafe programs is a combination of a telematics device that tracks your teen's driving habits, and a Smart Phone app that will send you alerts if they are engaging in risky driving behavior, like speeding, driving past curfew, accelerating unsafely, and other unsafe practices.
The DriveSafe program is not like other driver-tracking devices in that it won't affect your insurance rates (or your teen's) one way or the other; rather, if offers an ongoing monitoring for parents to put their minds at ease, while being a very big incentive for the teenage driver to drive in a safe, responsible manner. The tradeoff, of course, is privacy and the indignation your son or daughter may feel when mom and dad decide they need to be "tracked." Those are issues that each family has to settle according to its own rules and dynamics; but if you want a higher level of control in those first years or months your teen is behind the wheel, this is the program to provide it.
Having said all that, there still is the reality that teenage drivers need insurance and, because they're considered high risk, it's relatively pricey. If your current insurer will add your teenager to your policy, rates will likely be considerably lower-- they can always reimburse you. There are no companies we found that are better or worse, rate-wise, when it comes to teen drivers, but larger, direct sale companies like Esurance and GEICO might possibly be new driver friendlier. In addition, virtually all companies offer good student discounts, which can provide an additional incentive for a new driver to hit the books.
There are plenty of solid roundups for auto insurance, most based upon customer satisfaction surveys, including ConsumerReports.org (which is available by subscription only), J.D. Power and Associates and Insure.com. Others are based upon evaluations by knowledgeable experts, such as those at NerdWallet.com and Reviews.com. While customer reviews are harder to come by, we did find a decent number at Viewpoints.com, a site that is available for reviews of any type of product or service. However, do note that people tend to review car insurance companies more often to complain, not to praise, so these may not be the best guide for your specific circumstance.