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January 26, 2019

With so many car insurers in the marketplace, your shopping process can feel overwhelming.

Our list of the best car insurance companies can provide a starting point for you. We’ve based them on more than 200 hours of research by the editors of our sister company, ConsumersAdvocate.org.

We encourage you to do your own research, too. Pick the company (or broker) that best meets your specific needs. Lastly — and we can’t stress this enough — get at least three quotes from different insurers before making up your mind. You won’t know which companies offer the best savings until you compare rates.

And remember, it’s not always only about the quotes. Consider a company’s customer service and reputation. These details will matter when you need to file a claim. Ideally, your insurer should have great rates as well as a streamlined claims process and responsive customer support.

7 Best Car Insurance Companies

We recommend these seven best car insurance companies for 2020:

  1. Progressive: Best for Coverage Options and Discounts
  2. Allstate: Best for Local Agents and Customer Service
  3. State Farm: Best for Discounts
  4. Esurance: Great Online Presence
  5. Geico: Best for Competitive Rates
  6. The Insurance Center: Best for Customers in Upper MidWest
  7. Liberty Mutual: Runner-up for Best Coverage and Discounts

Progressive – Best for Coverage Options and Discounts

As one of the largest auto insurers in the U.S., Progressive claims nearly 10 percent of the market. Progressive has some nice options and features such as:

  • Rideshare Coverage: Special protections if you drive Uber or Lyft.
  • Deductible Savings Bank: Reduces your deductible by $50 for every six months you go without filing a claim.
  • Name Your Own Price: This tool provides customized insurance options based on your budget.
  • Snapshot: This program records your driving habits through a small device that plugs into your car or through an app. (Progressive claims that the average driver saves $145 per year with this feature.)
  • Coverage for Custom Parts: Custom parts cost more and tend to be excluded from or limited by auto coverage.

This wide range of coverage options helps you choose exactly what you need without paying for unnecessary extras.

Progressive also has the stability to back up its service:

  • A.M. Best: A
  • Moody’s: A2
  • Standard & Poor’s: A

J.D. Power awarded Progressive three out of five stars for claims satisfaction, and the company has a complaint ratio of 1.11 with the National Association of Insurance Commissioners (NAIC), a score which is only slightly higher than average. None of these scores are stellar, but they’re relatively good for a company as large as Progressive.

Allstate – Best for Local Agents and Customer Service

Allstate, another huge insurer, offers home, life, auto, boat, motorcycle, and renters coverage in all 50 states.

These features set Allstate’s auto coverage apart:

  • Good Hands Repair Network: Not sure where to get a specific repair for your car? Allstate has connections with more than 3,500 shops through its network.
  • Drivewise Program: This app can monitor your driving habits and extend discounts based on your driving and braking speed. You’ll get a 10 percent discount just for using Drivewise and a chance to earn a 25 percent discount after six months.

The Drivewise app is particularly helpful if your policy includes younger drivers who tend to get charged higher premiums. Drivewise gives teens and other inexperienced drivers a chance to prove they’re better than the average young driver. Safer driving habits can reduce premiums.

Allstate is financially solid, obtaining the following ratings:

  • A.M. Best: A+
  • Moody’s: Aa3
  • Standard and Poor’s: AA-

State Farm – Best for Discounts

State Farm writes about 1 in 6 auto insurance policies in the United States, making it the nation’s largest car insurer. The company has a number of discounts for safe drivers, returning customers, and those who bundle multiple insurance policies.

You can also save with:

  • Steer Clear Driving Program: Drivers younger than 25 can qualify for this discount by taking a training course, practicing their driving, and joining a mentoring program. The goal: creating safer driving habits.
  • Drive Safe and Save: Drivers 25 and older can save 5 to 30 percent by installing a mobile app that tracks driving habits and sends to State Farm.
  • Extended Rideshare Coverage: More and more carriers have special coverage for Uber, Lyft, and other rideshare drivers; State Farm’s coverage extends even when you’re not carrying a passenger.

State Farm has a 7.5 score on Trustpilot for its customer service.

They are also rock-solid financially, holding the following ratings:

  • A.M. Best: A++
  • Moody’s: A2
  • Standard & Poor’s: AA

Esurance – Great Online Presence

Esurance, launched in 1999, pioneered online auto insurance. Now, Esurance is part of Allstate, giving policyholders tech-friendly access to coverage backed by an established insurance company.

Esurance offers:

  • DriveSense: This app scores your driving habits and provides you with customized insurance discounts.
  • Fuelcaster: A fuel price forecasting tool.
  • E-star: A network of auto repair facilities that guarantee insured repairs for the life of your car.

Esurance has a slightly higher NAIC customer complaint ratio of 1.79. (For reference, 1.00 is average.) And, the company doesn’t offer coverage in seven states: Alaska, Delaware, Hawaii, Montana, New Hampshire, Vermont, and Wyoming.

Allstate, which underwrites Esurance policies, carries the following financial ratings:

  • A.M. Best: A-
  • Standard & Poor’s: A-

GEICO – Offers Some of the Cheapest Auto Policies on the Market

GEICO has based its entire business model on saving you money on car insurance. With a 13 percent share of the market, GEICO is now the second-largest auto insurer in the nation.

GEICO offers:

  • Stellar customer service: The NAIC has recorded a customer complaint score of a mere 0.56, much lower than the industry average 1.00.
  • Stable coverage: The company can boast the top-notch A.M. Best financial rating of A++, and a strong Standard & Poor’s rating of AA.

The Insurance Center – Best for Customers in the Upper Midwest

For residents of Wisconsin and Iowa who want to work with a local agent, The Insurance Center provides a good place to start.

Founded in 1966 to help dairy farmers get good health insurance, The Insurance Center has expanded into areas such as life insurance, homeowners insurance and, of course, auto insurance.

An insurance agent can help a lot if you have a unique situation such as a poor driving record or an unusual vehicle. Agents can zero in on the best companies for your specific needs. So if you live in the Upper Midwest and prefer discussing your options with an expert, The Insurance Center is well worth exploring.

Liberty Mutual – Honorable Mention for Coverage and Discounts

Liberty Mutual is the sixth-largest auto insurance provider in the country, writing over $11.7 billion in premiums for 2019. As a leading insurer, Liberty Mutual offers policy options that benefit a wide variety of customers.

Liberty Mutual offers:

  • One-of-a-kind coverage for teachers: This covers vehicle vandalism on school property, vehicle damage occurring during official school business, and personal property losses for teaching materials.
  • A comprehensive list of discounts: The company provides industry-standard accident free and safe driving discounts but also issues unique discounts compared to other major insurers, such as the Alternative Energy Discount for hybrid or electric vehicles, and its RightTrack program that offers up to a 30 percent discount for safe drivers.

Liberty Mutual ranks as average or below average for customer satisfaction. This is reflected in its J.D. Power’s 2019 Claims Satisfaction Survey “about average” ranking and its NAIC complaint ratio of 1.56.

Financially, Liberty Mutual stands on very solid footing with positive scores from the major credit rating agencies:

  • A.M. Best: A

The Cost of Car Insurance

Auto insurance isn’t cheap. AAA estimates you’ll pay around $1,250 a year for full-coverage on a mid-size sedan.

Your location and personal details could add more to your rates. And, of course, more expensive vehicles will cost even more to insure.

We all want to save money, but cheaper isn’t always better with auto insurance. In fact, cheaper isn’t always cheaper. If you were in a collision and your coverage wouldn’t pay, you’d be on the hook for the repairs.

As an at-fault driver in a collision, you could be sued for damages. Could your liability coverage absorb your losses? If not, your cheap car insurance could cost you dearly.

Smart Ways to Lower Auto Insurance Rates

You can lower your auto insurance premiums without compromising your coverage — and that’s what this post will be about: Finding ways to balance good auto insurance coverage with smart ways to save.

You already know about safe driving discounts, bundled policy discounts, and discounts for having modern safety features installed on your car. So we’ll look into other savings opportunities such as usage-based discounts (UBI).

Some of the most overlooked ways to save money depend on how you build your policy and how your coverage fits your needs. So we’ll first explore these factors to find simple ways to reduce your premiums.

Important Things To Know About Auto Insurance

  • Know the law: Minimum auto insurance requirements vary by state. Your state’s coverage requirements will offer a starting point as you build or modify your coverage.
  • Know you may need more: You might need more coverage than your state requires such as extra liability coverage, personal injury protection (PIP), and additional uninsured and underinsured motorist coverage.
  • Know when you can cut: Consider reducing the amount of optional coverage on your older vehicles, especially if you have comprehensive coverage and your car is worth less than 10 times your premium.
  • Know your deductible: You can save money on your premium by choosing the highest deductible you can afford out of pocket.
  • Know your market: Get quotes from at least three auto insurance companies to find the best rates and discounts. A regional or local insurer in your market may have lower rates than the big, national brands.
  • Know when to review: Reassess your auto insurance coverage needs every year to make sure you’re fully protected. Compare your rate with the rates other companies offer. Could you get cheaper car insurance elsewhere?
  • Know your car: Shop around and get auto insurance quotes before you buy a new car.

How Your Auto Insurance Rate Is Determined

It’s really quite simple: You’ll pay less for auto insurance when you drive safely and avoid collisions and traffic violations. But even drivers with clean records may pay thousands of dollars a year because rates depend other factors, too.

Along with your driving record, the Insurance Information Institute says your premiums will depend on:

  • How often and how far your drive: More driving means you’re statistically more likely to be in a wreck — so more driving equals higher premiums.
  • Your location: Insurers consider the safety of your region’s roads, the likelihood of auto theft, and the population density in your region.
  • Your age and gender: Drivers younger than 25 pay a lot more for coverage. Males usually pay more than females.
  • Your vehicle: Your vehicle’s repair costs, its safety features, and its value impact your coverage.
  • Your credit score: This isn’t about whether you’ll pay your bill on time; it’s about your tendency to take risks. Insurers have found a correlation between lower credit scores and higher chances of filing a claim.
  • The policy and coverage amount you choose: Your deductible, your coverage limits, your extra features — they have a big affect on your premiums.

You can control some of these factors such as your car, your driving habits, and your credit score. Other factors — such as your location and your age — are out of your hands for the most part.

Controllable or not, insurers combine all these factors to assess your chances of filing a claim. When an insurer takes on more risk of paying a claim, it will charge higher premiums.

If you think this isn’t entirely fair, you’re not alone. Consumers often claim some of these factors have nothing to do with their chances of having a wreck. Gender has been a controversial factor, and at least seven states have passed legislation banning car insurers from using gender to assess premiums.

Most leading insurers have adopted new technology to directly monitor driving habits and assess risk accordingly, and we’ll learn more about those methods below.

Still, most insurers in most states continue to use traditional underwriting methods. This is the playing field as you shop for the best coverage at the best price.

How MONEY Looks at the Best Auto Insurance Companies

There are a lot of insurance companies in the market today. This is good because competition tends to drive down prices. However, it also means shopping for insurance can become overwhelming.

To generate our list of best companies, above, we analyzed these criteria, and we recommend you consider these factors, too:

Coverage Options & Discounts

Even a policy from the best companies won’t be useful if it doesn’t provide the coverage you need. Likewise, even with the lowest rates, you’ll pay too much if you buy more coverage than you need.

That’s why you should scrutinize your policy to make sure you are not paying for costly options that are irrelevant to your situation. Ask yourself: Do you need the coverage you’re buying?

You should also consider whether you’re buying enough coverage. If you’ve put a lot of work and money into your car by adding customized parts, you may need extra or specialized coverage. Standard coverage may not protect your full investment in an accident. We gave extra credit to insurers that provide a lot of easy-to-use coverage options.

The same is true for discounts. Discounts that apply to only a few people aren’t all that valuable. We looked for insurers offering a wide range of discounts and additional savings opportunities through technology-based programs.

Financial Standing

We considered the financial strength of individual insurance companies (but not marketplaces) in our recommendations. Nobody wants an insurer that struggles to pay claims and has to sell your policy to a different insurer. While this isn’t the worst thing that could happen, it could delay the payout.

We included only financially-stable companies on our list as measured by their A.M. Best, Moody’s, and Standard & Poor’s ratings.

Customer Service

Comments and consumer reviews about insurance companies are almost always negative. Unlike angry customers, happy customers just don’t have much incentive to go online and share their thoughts.

While we don’t ignore remarks people post online about particular insurance companies, we understand they don’t give us a total picture of customer experience. For this reason, we paid more attention to customer service metrics as measured by J.D. Power and the NAIC.

How To Choose the Best Auto Insurance Coverage For Your Needs

You can save the most money on car insurance by driving safely, avoiding wrecks, and staying out of speed traps. How you build your policy matters a lot, too. Here’s a step-by-step guide for assessing your needs:

Step 1: See Your State’s Requirements

At the very least, you’ll need to buy your state’s mandated minimum coverage before taking your car on the road. Most states require liability coverage which would pay if you caused property damage or personal injury to others.

A few states also require personal injury protection (PIP) for yourself and/or coverage in case you’re struck by an uninsured or underinsured motorist.

Step 2: Consider Additional Requirements

Next, consider whether your state’s minimum coverage is enough to protect you. For the most thorough analysis, check with an agent who can tell you the size and frequency of car insurance claims in your area.

For example, according to the Insurance Information Institute, Florida requires only $20,000 in liability insurance for bodily injuries. Yet, in 2018, the average claim for bodily injury in the United States exceeded $15,000. This means Florida’s minimum requirements may not cover your liability.

For the most liability protection, consider an umbrella policy which can extend beyond your auto coverage to other policies.

Step 3: Do You Need Extra Features?

Finally, consider whether you need other types of common insurance products. If you couldn’t pay the following expenses out of pocket, consider getting insurance to help:

  • Uninsured Motorist and Underinsured Motorist insurance: This covers you if you’re hit by an at-fault uninsured or underinsured motorist. This can be especially good to have in certain states, such as Mississippi, where an estimated 24 percent of all motorists are uninsured. Underinsured motorist coverage will protect you if an at-fault driver who injures you doesn’t have enough liability coverage to pay your medical bills, lost wages, and disability.
  • Personal Injury Protection: This helps pay your own medical bills and lost wages if you’re involved in a car crash. Even if you have good health insurance, a serious accident could cause many thousands of dollars in co-pays, deductibles, and other uninsured medical expenses. Personal Injury Protection could cover you for those expenditures.
  • Collision insurance: This covers damage to your vehicle if you are involved in an accident, regardless of who is at fault. As with uninsured and underinsured motorist coverage, collision insurance is an especially good idea if you live in an area with a high percentage of un- and underinsured drivers. Most lenders require you to carry collision coverage until you’ve paid off the car.
  • Comprehensive insurance: This covers non-collision damages to your car: theft or damage from wind, hail, or water, for example.
  • Roadside Assistance: Some insurers can help if you’re broken down on the side of the road or need a tire change. You could also join AAA and save on this portion of your auto premiums.

Reassess Your Auto Insurance Company On A Regular Basis

Most auto insurance policies are written for a term of six months. This means that twice a year you can easily renew or drop your coverage.

Every six months, or at least once a year, ask yourself whether your current coverage is sufficient or redundant. For example, if you just got roadside assistance through a recently opened credit card, you can drop your policy’s roadside assistance. Or if you’ve started driving for Lyft, add on coverage for rideshare vehicles.

Similarly, you should compare quotes from different companies each time your policy comes up for renewal. It takes only a few minutes to shop around — especially if you use an insurance marketplace. This is especially true if your situation has changed recently; if your teenager just got licensed, for example.

Brokers vs. Online Insurers

Most of us don’t consider insurance brokers when shopping for car insurance. Why not? According to Gilberto Sánchez, a licensed insurance broker with over 20 years of experience, people look to brokers for most other types of insurance.

“Typically, customers go to a broker for life and homeowners insurance, but less often for auto,” he said. “Many prefer to shop online and do the legwork themselves, but consulting an independent insurance agent can be especially beneficial for those who have little experience comparing rates, don’t know or understand their state’s minimum auto insurance requirements, or simply want the convenience and added security of running their needs by an expert.”

If you like face-to-face interaction, personalized service, and a handful of options tailored to your needs, consider using a broker. If you already know how much insurance you need and you’re comfortable buying insurance online, comparison shopping on your own could be your best bet.

The Future of Auto Insurance

Consumer advocacy groups across the nation have contested the use of personal details such as credit scores to help price car insurance. So more companies are seeking better ways to assess individual risk. The latest trend is usage-based insurance (UBI) or telematics.

Telematics uses wireless technology to monitor drivers’ behavior on the road. Most of the insurers on our list of best companies offer telematics. These devices let insurers track how far you drive, how fast you drive, how quickly you brake, and how you handle speed bumps and curves. This data helps insurers set premiums based on actual driver behavior instead of on projected behavior.

So far, insurers have two telematics-based insurance options:

  • Pay-as-You-Drive Insurance (PAYD): These plans work with a GPS device that transmits mileage data back to the insurance company. These are typically recommended for motorists who don’t drive often or far.
  • Pay-How-You Drive Insurance (PHYD): More sophisticated than its PAYD counterpart, these plans also work with GPS technology and with accelerometers that track speed, location, date and time, cornering technique, and lane change frequency.

These devices create transparency and allow insurers to use actual facts to set premiums. But they also threaten the privacy of policyholders, and researchers have questioned the quality of the driver data collected and how insurance companies use the data.

Still, a UBI program can save drivers about 3 percent on premiums. This discount, coupled with others that may be available, could decrease overall rates, especially for infrequent drivers who take safe routes on even terrain.

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