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Most people probably wouldn’t describe shopping for car insurance as exciting or enjoyable. So it may be tempting to buy a policy from the first insurer you come across.
Car insurance companies all offer fairly similar products. But the cost of auto insurance varies significantly across providers, since each company has its own method for evaluating your personal circumstances, such as the type of car you drive, your age, and your driving history. There are dozens of factors that determine your rate; some are in your control and some are not. That’s why it’s important to do your research and compare your options when choosing the best car insurance company for your needs.
Once you have an idea of what your premium might be from a few different companies, then you can look at aspects that set certain car insurance companies apart from others, like auto coverage add-ons or customer satisfaction ratings.
To help you get started, we’ve outlined a few of our favorite car insurance companies for a broad range of drivers, whether you’re looking for a cheaper premium, discounts for safe driving, or an insurance company with high satisfaction rates. Accessibility, auto claims satisfaction, price, and the company’s financial health are all key factors we consider in our recommendations.
While no single car insurance company will be the best for every person, we think these are the ones to consider when in the market for car insurance.
Before You Start
If you want to save on car insurance, comparison shopping is crucial. But before you start, review the basics on how auto insurance works. Once you have a good understanding of how much coverage you need, shop around for rates. You can use comparison tools online, get quotes directly from insurers’ websites, or pick up the phone and talk to an agent.
Our Picks for the Best Car Insurance Companies
GEICO, the second-largest car insurer in the country, insures nearly 30 million vehicles, according to its website. Its availability in all 50 states and Washington, D.C. makes it easily accessible for consumers nationwide.
A subsidiary of the Berkshire Hathaway conglomerate owned by investor Warren Buffett, it offers all the standard car insurance coverages for some of the lowest rates — plus discounts. Because Geico has a lengthy list of car insurance discounts, there’s a good chance you can find one that applies to you.
Average annual premium for full coverage: $1,405
Why we recommend it: Though it ranks slightly below average for claims satisfaction in the 2020 J.D. Power U.S. Auto Insurance Claims Satisfaction Study, we think GEICO’s vast accessibility and good tech support offer a lot of value. Its robust website and app let you manage your policy, get quotes, and file claims from anywhere. There’s 24/7 customer service available online and through a call center. About 97% of GEICO’s policyholders were satisfied with the service they received, according to a 2020 study by Alan Newman Research, a market research company.
Amica, founded in 1907, calls itself the nation’s oldest mutual insurer of vehicles. But its long history isn’t the reason why this company is worth a look. It offers a generous menu of auto insurance policies with some attractive built-in perks that are difficult to find at other companies, including no deductible for the repair or replacement of a deployed airbag and $1,000 for bail bonds. It also offers higher-than-usual coverage limits. For example, many auto policies stop at a maximum of $300,000 or $500,000 per accident for liability coverage, but Amica offers over $1 million in additional liability coverage for unexpected and costly events. You don’t necessarily need that much coverage, but having it can work to your benefit if you’re ever caught in a major claim or lawsuit.
Average annual premium for full coverage: $1,378
Why we recommend it: Amica stands out for its claims satisfaction, ranking among the best in the 2020 J.D. Power U.S. Auto Insurance Claims Satisfaction Study. It also has the cheapest average annual premium of insurers on this list. This budget-friendly company doesn’t offer the most unique discounts, but it offers many standard discounts for customers — like savings for bundling policies or for having more than one car on the policy.
Nationwide is one of the biggest — and most recognizable — names in the auto insurance industry. Since 1925, it has grown into a Fortune 100 company that offers various insurance products and discount programs in 46 states and the District of Columbia. Along with standard liability and vehicle coverage options, it offers add-ons like towing and labor coverage and rental car reimbursement to customize your policy to your circumstances. Its average annual premium is the priciest among our picks, but its discount programs might make up for it with some drivers. For example, you can save up to 20% a year when you combine home and auto insurance with Nationwide and up to 40% if you sign up for its telematics program, which monitors your driving in real time. The company’s optional Vanishing Deductible feature, which lets drivers take $100 off their deductible for every year of accident-free driving, is also notable.
Average annual premium for full coverage: $1,485
Why we recommend it: Nationwide is an attractive choice for drivers who prefer a lot of options to build their auto policy. It offers nearly a dozen types of coverage — from liability, comprehensive, and collision insurance to gap insurance, personal injury protection, and more. More options give more choice to the consumer to customize all the specifics of their auto policy. Additionally, Nationwide stacks up fairly well against its competitors in the auto insurance industry when it comes to claims satisfaction. Of this list, it ranks the second highest in the 2020 J.D. Power U.S. Auto Insurance Claims Satisfaction Study.
Travelers is a reputable insurance company with a long history and good coverage options that’s available in 42 states and the District of Columbia. It offers insurance options that most drivers need, such as liability, comprehensive, and collision coverage, along with some extra add-ons, like accident forgiveness and roadside assistance. The average premium is on the higher end of the spectrum, but there are plenty of discounts to offset your car insurance premiums. For example, you can get a discount on your premium if you have a hybrid or electric vehicle or insure multiple vehicles with Travelers.
Average annual premium for full coverage: $1,325
Why we recommend it: For drivers looking for a car insurance company with solid customer service, Travelers can deliver. Like many other auto insurance companies, Travelers makes it possible to go totally paperless by letting its customers submit claims online, over the phone, or through the Travelers mobile app. On the J.D. Power 2018 U.S. Auto Claims Satisfaction Study, Travelers scored slightly below the industry average, but was still ahead of some major providers like Progressive and AAA. Reviews for Travelers indicate that customers are consistently pleased with its customer service, multiple discount options, and insurance bundles.
State Farm is the largest car insurance company in the U.S., offering all the usual car insurance coverages, plus a few helpful add-ons like rideshare insurance, gap insurance, and pet injury protection. The Illinois-based has nearly 19,000 agents who can help you pick the insurance coverage that fits your needs and budget. As of 2019, it has 44 million active auto policies in the U.S.
Average annual premium for full coverage: $1,457
Why we recommend it: State Farm stands out as an insurance company for its fair prices, accessibility, and auto claims satisfaction. State Farm’s average annual premium rate is slightly higher than other rates on this list, but still relatively low compared to the rest of the industry. In terms of accessibility, this company not only offers flexible and expansive auto coverage, but its huge network of agents also makes it easy to find an agent near you in person or over the phone. As for auto claims satisfaction, this insurer ranks high.
Honorable Mentions for the Best Car Insurance Companies
There are some smaller or more exclusive insurers that have better rates and higher customer satisfaction ratings than the big names. We included these car insurance companies as honorable mentions because they rank highly across several categories but are available on a more limited basis for a smaller number of drivers. But if you do qualify for coverage, they could be worth a look.
USAA is a leading car insurance company in several categories. It ranks high in affordability, customer satisfaction, and its breadth of coverage options. It only offers insurance to military members, veterans, and their families, making it an ideal one-stop shop for those in that category but not the rest of the U.S. population. Many of its features are designed specifically for military members’ needs. For example, customers can get reduced rates for low annual mileage and up to a 60% discount for vehicles stored during deployment. It has one of the highest claims satisfaction ratings, according to J.D. Power.
Average annual premium for full coverage: $1,225
Erie Insurance doesn’t offer insurance across the nation, but if you’re looking for an affordable premium and live in one of the few states it’s available in, it is notable for its low rates. It offers coverage in 12 states — Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin — and Washington D.C. Although it’s limited to these states, its average annual premium is the most budget-friendly of this list. Erie sells insurance exclusively through its network of independent agents and none of its insurance offerings can be purchased from the company directly. Erie has one of the highest claims satisfaction ratings, according to J.D. Power.
Average annual premium for full coverage: $1,233
Auto-Owners Insurance Company offers several types of insurance through independent agents in 26 states, including auto, homeowners, and life insurance. It offers a multi-policy discount and many standard coverage options that other insurance companies do. It’s ideal for drivers who value a one-on-one relationship with an agent and aren’t concerned about extra features, such as an app or unique coverage add-ons. Auto-Owners has the third highest claims satisfaction ratings, according to J.D. Power. Plus, its car insurance rates are relatively low compared to other popular insurers.
Average annual premium for full coverage: $1,351
Best Car Insurance Companies of 2021 Summary
|Insurance Company||Average Annual Premium for Full Coverage||J.D. Power Claims Satisfaction Score, 2020||A.M. Best Rating, 2020||States Available|
|USAA (Honorable Mention)||$1,225||890||A++||50|
|Erie Insurance (Honorable Mention)||$1,233||880||A+||12|
|Auto-Owners Insurance (Honorable Mention)||$1,351||890||A++||26|
4 Tips to Pick the Best Car Insurance Company For You
Choosing a car insurance company can be difficult. There are so many factors to consider, from the company’s claims satisfaction rate to overall customer service, premium rates, and more. And sometimes, car insurance companies aren’t as helpful as they should be in the decision making process.
“Insurance is an essential financial service, and yet the sales are done in such a way that it’s really opaque to consumers,” says Birny Birnbaum, the executive director of the Center for Economic Justice and an expert on insurance. “You should be clear on what coverage you’re purchasing.”
Find a car insurance company that meets your needs and get enough coverage for an affordable rate by following these tips.
1. Assess Your Current Needs and Financial Situation
To get started, take a look at your own financial situation and your vehicle’s model and age in relation to your state’s minimum auto insurance requirements. Consider how much coverage you feel comfortable with, how that could affect your budget, and whether you need to increase your limits to protect you and your assets.
2. Research Car Insurance Companies
Spend some time researching car insurance companies online. Read reviews and see what type of coverage options each company offers. As a starting point, you can ask friends and family for recommendations. Or if you already have homeowners or life insurance with a specific company, you could look into bundling that policy with an auto insurance policy for a discount. “Ask if there’s anything that this particular insurance company is providing that most insurers are not providing, or if they’re not providing something that most other insurers are providing,” says Birnbaum. “You want to ask if they’re an outlier — in a good or bad way.”
3. Compare Car Quotes
Narrow your choices and make a list of your top three insurance companies. Get insurance quotes from those companies and compare them. You can get car insurance quotes a few ways: online with a comparison tool, directly on an insurer’s website, or over the phone with an agent. When you’re comparing, look at prices but also at how much coverage you’d get with each insurance company — and consider any extra perks, like roadside assistance or accident forgiveness.
4. Ask Important Questions
If you’re in touch with an insurance agent, ask the agent what factors will most affect your rates. “Ask what information will you use to assess my risk and how do I check to see if the information you’re using is accurate?,” says Birnbaum. For example, some companies take credit scores or education levels into consideration to come up with auto quotes. Also, ask about any discounts that apply to you.
Frequently Asked Questions
What’s the difference between buying from an independent insurance agent or a captive insurance agent? Can you buy car insurance without an agent?
There are a few ways you can buy car insurance. You can buy it online without an agent’s help, but it does require more legwork in terms of understanding and comparing policies. If you prefer to work with a car insurance agent, know that there are two types of agents: independent and captive. Independent agents work for themselves and aren’t tied to a specific insurance company, so they’re able to be more objective and can recommend policies from a variety of car insurance companies. They can sometimes be a little pricier because their income comes from their sales. Captive agents are the complete opposite; they work for a single insurance company and only offer their company’s insurance products. You’ll most likely speak to a captive agent if you call an insurance company to get a quote.
Do auto insurance companies share your information about claims and policies?
Yes, auto insurance companies track and share any insurance claims you make on your property and casualty policies (homeowners, auto, etc.) with specialty consumer reporting agencies. An example of a specialty consumer reporting agency is LexisNexis, which owns a Comprehensive Loss Underwriting Exchange database, or CLUE. Insurers subscribe to CLUE to learn about claims that you’ve filed in the past, which then helps them decide how much to charge you for a policy. They can also gather peoples’ driving records, which is already publicly available information.
Can car insurance companies drop policyholders?
Insurers can’t cancel a policy that’s older than 60 days, according to the Insurance Information Institute (III). But there are a few exceptions to that rule. An insurance company can drop you as a policyholder if you don’t pay the premium. They can also cancel a policy if you’ve committed fraud, misrepresented yourself on the application, or your driver’s license is suspended or revoked while your policy is in force.
To determine our picks for the best car insurance companies, we started with a list of 25 of the largest car insurance companies by premiums collected, based on data from the National Association of Insurance Commissioners. From there, we applied a series of filters to narrow the field across key categories like cost, availability, and customer satisfaction.
For starters, all our top picks must be universally available to all consumers in at least 40 states. Our top picks all offer at least five discount programs, which are a key way in which premiums can become more affordable for people. To gauge affordability, we looked at Bankrate’s average annual premium across these carriers and eliminated any with an average yearly cost of more than $1,500 for full coverage. Bankrate, like NextAdvisor, is owned by Red Ventures. Next, we looked at J.D. Power’s 2020 U.S. Auto Insurance Claims Satisfaction Study, and ruled out any companies that scored below 850 on a 1,000-point scale (the industry average was 872). Finally, we looked at each insurance company’s A.M. Best rating, which evaluates a company’s financial standing. Financial solidity matters for insurance companies because their customers depend on them to pay their claims if they’re in an accident or experience an insured loss. In other words, an insurance company that has the wherewithal to stay in business is more dependable long term. We ruled out any company that doesn’t have A.M. Best’s rating of A+ or higher. We also eliminated any companies that are involved in any active fraud investigations.