Shop around for the best protection and value
Turn on your TV for 5 minutes and you'll probably see a commercial for car insurance. Some of them are 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 or woman, Or lizard.
The fact is that 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, boat, motorcycle or life insurance.
Types of auto 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 (with the exception of NH, which allows you to opt out if you can prove you have sufficient financial resources).
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.
Some tips when looking for insurance
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. On the plus side, bigger companies tend to have higher financial ratings, meaning they're most likely to have the cash on hand to pay all their obligations, and representatives are often available 24 hours a day, seven days a week.
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.
How we found the best car insurance companies
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 many people only post complaints, not compliments. However, J.D. Power and Associates conduct 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. We recommend taking a look at our recommended companies, comparing them to each other, to find the perfect coverage for your car and your budget.
Elsewhere in this report:
Best Auto Insurance Company: There are some car insurance companies that just stand head and shoulders above the rest for claims settlements and customer service. We also found a highly affordable option.
Best Auto Insurance for Military Families: Military families sacrifice a lot for their country, and these are the car insurance companies who go the extra mile to make their lives just a bit easier.
Best Car Insurance for Risky Drivers: You may be considered high risk based upon your driving history or where you live. These companies are willing to work with you even if some others won't.
Buying Guide: Shopping for car insurance can be like trying to steer an out-of-control car. We answer many of your questions and offer tips for shopping here.
Our Sources: These are the expert sources and customer reviews we used to determine the best auto insurance. They are ranked in order of their credibility and usefulness.