Shop around for the best protection and value
Turn on your TV for five minutes and you'll probably see a commercial
for car insurance -- some of which 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, spokeswoman, or lizard.
And you absolutely should shop around for car insurance. What we've
learned in preparing this report over a number of years 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 algorithms (which happen with surprising frequency) might result in a
lower rate if applied to your circumstances. That means you have to do your own
At least once a year, at a minimum, 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.
One additional warning about those online quotes, though: the initial
quotes are generally based only upon the lowest rate that insurer can offer for
your geographical location and the type of car you drive. They may not take
into account the full amount of coverage you'll need, any add-ons like roadside
assistance, and any accidents you may have in the past. Those low rates are a
hook to get you to call for a full quote -- which might be higher than that
attractively low figure you got when you plugged in just your basic
information. The next step is to call the insurer and get the real numbers. So,
definitely, call more than one.
When you do make that call, there are a variety of factors that will
determine what you pay for car insurance. In addition to your location and type
of vehicle, that includes your age, driving history, 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.
This is the most basic kind of car insurance. 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
A step up, 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.
This will cover 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.
Not everyone has insurance, even if they should. This type of policy 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.
and Personal-Injury Insurance
You may not need this if you have a strong health care insurance plan;
in that case, opting out will save you some money. However, if that's not the
case, adding on this benefit 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. Of course, any of these will add to your annual
when looking for insurance
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 excellent driving records.
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, even if they have a
very poor driving record.
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.
car insurance companies
You won't see any clever commercials touting on TV,
but its tops in surveys conducted by Consumer Reports and J.D. Power and
Associates. Customers say that the company provides excellent customer service
and low-hassle claims service, from appraisal to payout, which is a relief for
those who have had to use it. The company also offers a rental car option, as
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.
If you drive an electric car, you might want to get a quote from The Hartford. It was our Best Reviewed pick last
year, and is still a solid choice with solid rankings, Amica merely edged it
out this year by a few points. In J.D. Power's two car insurance surveys,
Claims Satisfaction and Shopping, the Hartford is well above the industry
average in both. It also earns a 90 from Consumer Reports' survey.
The Hartford has a particularly wide range of policy option, including
one for electric vehicles -- to our knowledge the only company that offers that
at this time. This gives car insurance shoppers a great opportunity to save
money in more ways than is possible from other car insurance companies. It's
also one of only two car insurance companies endorsed by the AARP and offers
exceptional pricing and service to the 50+ market. Insurance coverage offered
by The Hartford is available in all 50 states.
There are a couple of close runners up to Amica Mutual and The Harford in
surveys -- and all of them offer coverage in all 50 states. Two of them, GEICO and
State Farm, we discuss in more detail below in our recommendations for cheap car insurance and car insurance for higher risk drivers. The third, Allstate Insurance, is new to our report this year,
although it's certainly been around for a long time.
While a number of the larger insurance companies don't have a very
strong consensus across several different surveys, Allstate is closer to the
top in more surveys than most. At Consumer Reports the company earns an 88 out
of 100, indicating that consumers are "Very Satisfied" with their
experience. The top score in that survey goes to Amica, with a 96; however,
most of the other companies in that top tier are smaller companies with more
limited geographical coverage; we discuss them in more detail below.
At J.D. Powers and Associates, Allstate earns an overall score of 864
for claims satisfaction, just below the top tier (again, most of the top tier
companies service smaller geographic regions), but above the industry average
of 858. Reviews.com makes Allstate an honorable mention, praising the company
for the variety of discounts offered, especially in the area of incentives for
new cars and new policy holders. Although they do note a few that it lacks,
such as a discount for multiple vehicles. Still, this is a company with strong
financial ratings that might be a good choice for those who own only one car,
have a good driving record, and are looking to change insurance companies due
to a rate increase.
isn't always better
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
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. It's also in the top tier in Consumer Reports' survey, with a
score of 94, 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
leader in low-cost car insurance
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 what 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, with a score
of 89 at Consumer Reports (under the name Berkshire Hathaway Insurance Group,
its parent company) and an 870 in claims satisfaction in J.D. Power's survey --
well above the industry average.
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. We discuss GEICO's military coverage options
in more detail in the next section.
GEICO also offers a wide variety of policy options and
discounts for non-military members, and the company earns solid financial
ratings. GEICO 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 also does well in owner satisfaction surveys and with
experts. It's number three on NerdWallet's list of cheap car insurance
companies, behind only GEICO and State Farm (covered below). However, there are
quite a few options for discounts and they even provide injury coverage for
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.
Military families are often eligible for steep
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
For the best, most affordable and
flexible coverage for military families, check out the highly rated
military-only option first: , 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.
Like many auto insurers, USAA makes
repairs easy, and maintains 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
Another option worth a look for
military families is GEICO, our top pick 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
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.
If you have a poor driving record, look to a
larger car insurance company
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 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, which we discuss in more
detail above, 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
Specialized safety programs are available for
There are few life events more
terrifying for parents than putting the car keys into the hands of their 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 (Free to existing customers), 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 too quickly or 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.
And if you do have another car
insurance company, you might want to get a quote from Esurance. A division of
Allstate, Esurance gets fairly middling scores in the two J.D. Power surveys it
appears in, but Reviews.com likes it's variety of policy options and discounts
and "excellent policy coverage." Esurance also gets a nod as a good
choice for cheaper insurance and its willingness to cover higher-risk drivers.
What the best
auto insurance has
representatives. Some companies
encourage you to use local agents, while others prefer to do business online or
over the phone. In either case, you should be able to report an accident and
file a claim 24 hours a day, seven days a week.
plans. You should be able to customize
coverage to fit your needs instead of being forced into a policy that offers
options you don't need or want.
wide range of discounts. Most insurers will knock a bit off your rate for a variety of factors: having a
good driving record or owning a newer car with a security system are just a
couple of examples.
policy options. One of the best
ways to save money is "bundling" policies, which means that, in
addition to car insurance, you may insure your home, life, RV, motorcycle or
have other insurance plans through the same company.
financial ratings. Several
independent ratings agencies regularly assess insurers' abilities to pay
claims, but A.M. Best's ratings are considered the most reliable and
Know before you
How much coverage do you need? Each state has certain minimum requirements for bodily injury and
property damage coverage. It's always worth double-checking the numbers on your
state insurance commissioner's website. Most experts recommend purchasing more
than the minimum; however, you need at least enough coverage to cover your
assets, and purchasing the state minimum is generally only enough to keep you
driving legally. If you're on a tight budget, though, that's certainly better
than nothing and will keep you out of worse difficulties in the case of an
What type of coverage do you need? Liability coverage is required by law of all car owners, but it
covers only expenses related to bodily injury or property damage you do to
others. If you want your own vehicle covered in the event of a crash, you'll
need collision coverage, and if you want it covered for anything other than a
crash -- a nasty hailstorm or vandalism, for instance -- you'll need
comprehensive coverage. Another major consideration is uninsured/underinsured
motorist coverage, which will cover you if the person who hits you didn't pony
up for his or her own policy. If you do not own your car outright, more
coverage will be required by your lender.
Is the car insurance company reputable? In recent years, a plethora of online-only insurance companies
have cropped up -- aimed mostly at very-high-risk drivers who can't find
insurance elsewhere. Some are highly-rated companies, and are often
subsidiaries of larger corporations that specifically handle high-risk drivers.
Do your homework, though, if you're dealing with a company that you've not
heard much about. Check their Better Business Bureau ratings and be sure they
have a solid financial rating as determined by A.M. Best. Also, high-risk
drivers should double check the premiums in their state's assigned-risk
program. Assigned risk is never cheap, but could still be a better deal than a
high-risk policy from a less-than-reputable insurer.
- Know roughly what you should pay. Figure out whether you're in a high- or
low-cost state for car insurance, and check your state's insurance department
website for hypothetical rates for customers with similar circumstances.
Remember that your credit score may affect your quotes -- if you have poor
credit, you could be penalized with higher rates.
- Compare, compare, compare. Rate-comparison sites such as those at Insure.com, Insurance.com, Netquote.com and Compare.com can help you get several car insurance quotes. Remember to contact other
insurers who might not use such tools to see whether they can beat the quotes
- Take advantage of discounts. Nearly all major auto insurers provide
a variety of ways to save, but be sure to ask for a full list -- they may give
you a break for everything from demographics to driving habits to what car you
drive. Note that available discounts may also vary by state.
- Think about a higher deductible. If you can afford to pay more in the
event of a crash or other catastrophe, you may be able to lower your premiums
by opting for a higher deductible (the amount you'll pay before insurance kicks
in). But it's a risk worth taking only if doing so won't put you in a financial
bind, experts say.
- Reassess your situation every year. Your insurer may lower your rate for
several reasons: if your credit score rises or if you're driving less, for
example, but they won't do so without prompting from you.
What's to come
Tracking programs may be
the future of auto insurance. Pioneered by Progressive Insurance with their
Snapshot program, these telemetric devices are to cars what the black box is to
an airplane. They track your every driving move, from braking, acceleration,
speed and more. Then, the insurance company can use that data to give you
discounts based upon good driving habits. At this time, they do not penalize
you by raising your rates, but many think that these trackers will someday do
just that. Right now, only a few auto insurance companies have car tracking
programs, but at least one study estimates that by the year 2020 more than 25
percent of auto insurance revenue will be generated by car-tracking-related
Expert & User Review Sources
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 Claims Satisfaction Study and Insurance Shopping Study, and a roundup at Insure.com.
Others are based upon evaluations by knowledgeable experts, such as those at NerdWallet and Reviews.com. Unlike other products we review, there are no specific
customer review sites for car insurance companies, but all of the surveys we
evaluated were based upon the experience and input of customers who have used
those companies' products.