Best Car Insurance Companies of 2020

Insurance
Best Car Insurance Companies of 2020

Money’s Top Picks

Progressive: Most customizable policies
Amica Mutual: Most comprehensive policies
State Farm: Most opportunities to save
Farmers: Best for discounts
Travelers: Quickest and most hassle-free online quote

More on Money’s Top Picks

Progressive

Progressive offers you the most control when it comes to how much you want to pay for your auto policy. It does this through its well-known Name Your Price tool, which neatly reverses the usual method of getting an insurance quote. You provide some basic information (address, vehicle make and model, owned or leased) and then state what you can spend. Progressive will then provide you with available policy options that may be within your budget. You can also compare their quotes to their competitors’ so you’re aware of other alternatives and their possible cost.

Another feature that’s geared toward helping drivers save is Progressive’s Loyalty Reward program, in which every policyholder is automatically enrolled. The program’s perks range from small accident forgiveness to bigger benefits such as continuous insurance discounts.

Progressive has garnered a J.D. Power overall customer satisfaction ranking of 856 (based on a 1,000-point scale), as well as a superior A+ rating from A.M. Best.

Progressive and COVID-19

The company announced that to help ease policyholders’ financial hardships due to the Covid-19 pandemic, it would give them a 20% credit on their auto policy at the end of April and May. For New York drivers, this credit will be applied to May and June.

Amica Mutual

Amica Mutual stands out with its most robust auto insurance package, Platinum Choice Auto. The package includes all the standard coverage options plus up to $5,000 for rental reimbursement with no daily limit, full glass coverage, and identity fraud monitoring. Perks that no other company offers include no-cost airbag replacement after it deploys, lock replacement in the event of stolen keys, $1,000 for bail bonds, and wage reimbursement if you’re required to appear in court.

Platinum Choice Auto also includes Advantage Points, a program where policyholders earn rewards for good driving, renewing policies, and referring others. Advantage Points can also reduce or even eliminate your deductible. It’s worth noting that some features vary by state.

Amica Mutual has the top spot in J.D. Power’s overall customer satisfaction index ranking. And with an A+ rating from A.M. Best, this mutual insurer is also on solid financial ground.

If you are ever in an accident, you can easily file a claim online, over the phone, or through their Amica’s mobile app. The company offers a wide range of discounts that allow drivers to save up to 30% on their premiums.

Amica Mutual and COVID-19

Every Amica Mutual customer that had one of their auto insurance policies on April 1st, 2020, will receive a 20% credit for April and May. Pending regulatory approval, these credits will be seen on bills for May and June.

State Farm

State Farm offers great savings on standard policies and a selection of specialty policies few other companies can match. For example, if you own a classic automobile or a sports car, are a teen driver, or plan on renting a car, there’s a State Farm policy that’s tailor-made for your insurance needs. The company also has programs designed to help drivers save. With their Drive Safe & Save program, drivers can pay up to 30% less after having their driving practices monitored and analyzed. Likewise, State Farm’s Steer Clear program lets drivers under 25 complete course training that may result in a reduced premium.

Another coverage option offered by State Farm caters specifically to rideshare drivers. As a driver for transportation network companies such as Uber and Lyft, you are covered by a company-provided basic auto insurance policy. Unfortunately, that may not be enough to fully protect you. With rideshare coverage, however, drivers are protected with all standard coverages except liability while the rideshare app is open on their phone.

As the largest auto insurer in the U.S., State Farm has an above-average customer satisfaction ranking of 878 with J.D. Power and a superior A++ rating from A.M. Best.

State Farm and COVID-19

In mid-April, State Farm announced that most policyholders would receive an average policy credit of 25 percent. Additionally, the company released a statement on May 18th indicating they’re working to reduce auto rates in every state by an average of 11 percent. The company encourages customers to contact their State Farm agent to discuss potential discounts.

Farmers

Farmers Insurance offers a broad range of discounts and other ways to save on auto insurance premiums. For starters, those who offer essential services, such as doctors, nurses, firefighters, teachers, and police officers, are eligible for a premium reduction. There are also discounts for homeowners, good students, cars with airbags, drivers with 2+ vehicles, and teenagers whose parents have good driving records. Eligibility for these discounts and their size varies depending on your place of residence and other factors.

Farmers Insurance offers another way to save through its innovative Signal program, where the company monitors your driving through a mobile app. After ten safe trips, you’ll receive a 5% discount on your policy. Once you renew the policy, that discount may increase up to 15%, depending on the score calculated by the app.

Another way to pay a lower premium with Farmers is by raising your deductible. In some cases, depending on your state, you can raise your deductible as high as $2,500. That’s a higher deductible option than almost any other insurance carrier offers. And not only does Farmers allow you to buy a policy with a substantial deductible, they actively encourage it. Of course, in the event of a collision, you’ll have to pay more out-of-pocket, so make sure you have the resources to do so — and consider how much you drive and how accident-prone you are.

Farmers received an A- rating from A.M. Best and a high J.D. Power customer satisfaction ranking of 865 on a 1,000-point scale.

Farmers and COVID-19

Farmers reduced some personal auto premiums by 25% in April and 15% in May. For New York drivers, this reduction will represent 40% of one month’s premium.

Travelers

In five minutes or less, Travelers can give you a quote using basic personal and car information. You don’t even have to provide a driver’s license number. If you request your quote while you’re still insured with another company, you’ll receive up to a 10% discount.

Travelers also offers policyholders a chance to save money through its IntelliDrive program. If you agree to have your driving monitored for 90 days using a smartphone app, you could end up paying less in your policy’s first term. Upon renewal, if you completed the program safely, you may receive an additional discount of up to 20 percent.

Travelers offers all the standard auto insurance policies required by state law, ranging from bodily injury liability and collision, to medical bill payments and comprehensive. In addition, the company also offers a long list of supplemental coverages which include roadside assistance and rental car coverage.

Travelers has a superior A++ rating from A.M. Best, and their J.D. Power overall customer satisfaction index ranking is 865 — based on a 1,000-point scale.

Travelers and COVID-19

In response to the economic impact of the pandemic, Travelers is offering all their personal auto insurance customers a 15% discount on their April, May, and June premiums.

Other Great Options

GEICO

GEICO has a reputation for being one of the most affordable car insurance companies. Despite this, we’d encourage you to always shop around and compare rates. GEICO is also the second-largest auto insurance provider in the United States. Despite their size, the National Association of Insurance Commissioners recorded fewer than 300 complaints against them in 2019 — a very low number. The national average Complaint Ratio for Private Passenger auto is 1.00; anything above that is considered high. GEICO has a ratio of 0.74, a very low number that speaks for itself.

GEICO and COVID-19

GEICO announced it would give policyholders a 15% credit on their next 6-month or 12-month policy term. This applies to new and existing policies until October 7th, 2020.

Nationwide

Nationwide offers its policyholders a free annual insurance assessment called the On Your Side Review. Its purpose is to help policyholders further understand their policy and benefits, receive all applicable discounts, and make changes to their policies after major life events.

Nationwide and COVID-19

Nationwide is offering a one-time $50 premium refund for auto policies that were active as of March 31st.

Liberty Mutual

Like many other insurers, Liberty Mutual offers various discounts. Unlike the others, however, it doesn’t limit the number of discounts you may be eligible for. This feature may reduce your premium substantially. The company’s website also provides a useful tool in the form of a coverage calculator that may help point you in the right direction.

Liberty Mutual and COVID-19

Liberty Mutual is offering relief to their customers in the form of a 15% refund on two months of their auto insurance premium. Late fees are no longer being charged automatically, and the company has temporarily paused personal auto coverage cancellations due to non-payment from March 23rd through June 15th. These dates may vary depending on your state.

Allstate

Allstate offers policyholders a chance to save on their premiums by driving safely with its Drivewise program, easily activated on their mobile app. Additionally, if you’re trying to understand the carewq/rewqonfusing ins and outs of auto insurance, the company’s website provides drivers with a wealth of information, helpful articles, and videos. Allstate also has high social media responsiveness on platforms like Twitter, replying directly to users on weekends.

Allstate and COVID-19

Allstate has announced it will return 15% of premiums for the months of April, May, and June.

QuoteWizard

This is an excellent comparison tool if you want to see a variety of quotes from different providers, side by side. QuoteWizard also claims that the information they provide is geared toward helping drivers save on insurance premiums. This tool might be most beneficial for drivers who want to double-check information from other sources before committing to one insurance company.

Methodology

To find the best auto insurance companies in the United States, we conducted over 200 hours of research, spoke to seven experts, vetted 23 insurers, and analyzed data points such as market share, customer complaints, coverage options, claims processes, discount availability, deductible flexibility, and customer support.

This process consisted of analyzing data such as market share, the number of complaints filed with the National Association of Insurance Commissioners (NAIC) for private passenger auto insurance in 2019, and the ratio of those complaints per policyholder to the mean. We also looked at AM Best Ratings for financial strength, and J.D. Power rankings for customer satisfaction.

More details on our methodology.

Most Expensive States for Auto Insurance

infographic that displays the most and least expensive states for auto insurance

Source: Insurance Information Institute

Top 15 Car Insurance Companies by Market Share

State Farm: 16.14% – Multiple programs to help drivers save
GEICO: 13.78% – Consistent low rates and robust online account management
Progressive: 12.25% – Wide range of coverage options
Allstate: 9.33% – Visit a local agent. Great customer service
USAA: 6.01% – A great resource for military members and veterans
Liberty Mutual: 4.62% – Bundle your policy with home, renters, or condo insurance
Farmers: 4.16% – Great discounts
Nationwide: 2.47% – Easy, entirely online process
American Family: 2.28% – Lifetime workmanship guarantee on repairs
Travelers: 1.94% – Innovative underwriting technology
Auto Club Enterprises: 1.43% – Top notch roadside assistance
Erie: 1.34% – Increase coverage limits cheaply
Kemper: 1.33% – Affordable policies
Auto Owners: 1.28% – Great option for mutual coverage
National General: 1.24% – Claims service guarantee

For the majority of Americans, auto insurance is a necessity. Without it, we would be exposed to the financial risks of collision, theft, or liability in the event of an at-fault accident. As a must-have, however, auto insurance can be expensive and rates are expected to continue increasing in the near future.

At its core, auto insurance is an investment of sorts — a safeguard against unwanted expenses. As a responsible driver, you’re likely interested in getting the right type and level of protection for yourself and your vehicle. At the same time, you might also be looking for the best way to save on premiums without compromising on coverage.

With auto insurance, it’s usually standard procedure across the Internet to recommend the most affordable option. And yet, there is an argument to be made that paying more upfront can save a lot of time and money if the insurer is more likely to properly support you during a potential claim.

That said, in these difficult financial times, it’s all about balancing needs with expenses. That’s why we decided to prioritize — based on research — those companies that offered the most inexpensive rates while not sacrificing coverage, efficient claims processing, and customer service.
*Data from the NAIC Life and Fraternal Insurance Industry 2019 report

Auto Insurance Industry Trends

New Technologies Save Lives but Not That Much Money

From reverse cameras to emergency automatic braking systems, the latest tech is being incorporated into new vehicles. Since these devices help prevent accidents, you’d expect that the cost of insuring cars that have them would decline. That makes sense — but there’s a catch. More sophisticated and technologically-advanced systems cost more to repair.

What Is Telematics?

Telematics is a way of monitoring a vehicle with GPS using smartphones or physical devices plugged into the vehicle to record speed, distance, braking, acceleration, among others. This technology is used to provide insight into a driver’s behavior behind the wheel as well as information regarding the car’s need for maintenance. Telematics can also measure fuel efficiency, notify another party of a collision, or dispatch emergency assistance if needed.

How Much Can You Save?

Some industry analysts expect that advanced tech may eventually save drivers money. Kevin Aries, Global Product Success leader for fleet management company Verizon Connect, believes that collecting data from vehicle telematics will ultimately drive premium prices down. “The more advanced way is really around how auto insurance companies are collecting that data […] so they can better optimize how they’re pricing their services,” he said.

A number of insurance companies give drivers an upfront discount on their premium just for signing up for a telematics program. If the data shows that they’re safe drivers, the discount may increase up to 15% upon renewal of the policy.

Another use of telematics lies in pay-per-mile policies, which base premiums on vehicle usage. If you don’t drive often or have short commutes, this kind of policy could help you save on your auto insurance. How much you save will depend on the kind of monitoring program you sign up for with your insurer.

Privacy Concerns

Some experts believe drivers will be more careful if they know they’re being monitored, thereby reducing their risk of being in an accident. Martin McRandal, former underwriter and telematics manager, believes that monitoring drivers and measuring their behavior behind the wheel will have positive results. “There’s a placebo effect, if you like,” he said. “What gets measured gets improved.”

With all the data that telematics collects, some concerns have been raised about privacy and who has access to that information. Since telematics tracks a vehicle’s movement, it could also provide insight into individual consumer behavior, like where a person shops and what restaurants they prefer. It’s the kind of big data advertisers would like to have. But while collecting data on shopping and restaurant choices may seem innocuous to some, there are a number of other situations where driving and location data could be used for more disadvantageous purposes.

McRandal thinks allowing telematics to monitor your driving is akin to forgoing your privacy in order to use social media. “There’s obviously a data protection issue,” he says. “But if you’re giving people a cheaper premium, in return for them allowing you to use their data for whatever purposes, I think it works,” he added.

The Future Of Telematics

The technology behind telematics has evolved considerably in recent years, and shows no signs of slowing down. Some studies indicate that by the year 2030, 146 million connected vehicles will be operating in the United States. All those vehicles will be producing a wealth of data that will bring forth many new developments and, according to the U.S. Department of Transportation, will save lives.

For his part, Kevin Aries believes there will come a time when most or perhaps all auto insurers will take advantage of this technology. “There’s an advantage to both the company and the consumer,” he said. “By leveraging data and a better understanding of the risk profiles associated with their customers, companies can provide accurately-priced products. On the customer end of things, safe drivers are rewarded with lower-cost insurance.”

What You Can Do To Save Money On Auto Insurance?

Bundle Insurance Policies

You can bundle policies under one company to save an average of 8% on your combined premiums, depending on the company. Typically, drivers combine their auto insurance with their homeowners or renters policy.

While having two policies under one roof can be convenient, we still urge you to shop around and make sure you’re actually saving by bundling.

Raise Your Deductible

A deductible is an amount you will pay out of pocket in the event of a collision before your insurance pays the rest. Deductibles are typically set at $500, but just doubling it to $1,000 can save you 13%. It may be a worthwhile gamble if you don’t drive a lot and aren’t accident-prone.

Raising your deductible can be a good way to save money — just be sure you’re making a well-informed decision. A 2018 study showed that 60% of people aged 22 to 37 have put away less than $1,000 in savings. If you’re in that category, then having a high-deductible policy might not be the best money-saving option for you.

Review Your Auto Policy Regularly

Since auto insurance premiums are on the rise in many states, reassessing your current policy every year before renewal can ensure you’re getting the type and level of coverage you need and can afford. You don’t even have to wait till your current policy is about to expire, you can shop around at any time.

A study found that in 2019, 72% of drivers said they would switch insurers in order to save money. If you were to find a policy that’s better suited to your needs and want to make the jump, make sure to check your current provider’s cancelation policy. You may be getting a better deal elsewhere, but at what cost? Get all information you need to make a well-informed decision.

Just like auto insurance policies are constantly changing, personal circumstances are also subject to change. Maybe you reached an age where you’re eligible for certain discounts, or perhaps you’re considering adding another car? Whatever the situation, take a close look at your auto insurance policy and make sure it’s still working for you.

Market Projections Timeline According Experts

The Auto Insurance Industry

Important Things to Know

Auto insurance is a form of financial protection, for you and your vehicle, against theft, collisions, and/or liability. Auto insurance is regulated at the state level, so your policy’s minimum liability limits will depend on your local laws. All states, with the exception of New Hampshire and Virginia, require drivers to buy insurance or at least pay some sort of fee.

In the United States, there are over 220 million drivers, the majority of which need to be insured by law. To assess risk and determine the premium you’ll pay, insurance companies use a wide range of information, like the kind of car you drive, your age, marital status, whether you own a home, among others.

With so many options and influencing factors, getting quotes and purchasing a policy online can be overwhelming. “I would say people should be a bit more educated about what they’re buying,” said Pérez. “When you go online and there is a lot of terminology you’re not familiar with, you may end up buying things you don’t need. Auto insurance is not cookie-cutter. It depends on a lot of different things. But insurance agents should have the ability to educate the insured and show them what’s available.” she added.

Factors That Drive Premiums Up

Underwriters assess risk to determine the chances of a policyholder filing a claim in the future. There are other factors beyond auto and driver risk that can affect auto insurance premiums, including:

Marital status: Single drivers aren’t considered as safe as married ones.
Commute: Longer and riskier commutes may raise your premiums.
Homeowner status: If you rent, you’ll pay more.
Accidents or tickets: These will run up your payments for three years, sometimes longer.

Also, there are the legal costs you may incur as well as the fees you could be required to pay.

The worse the offense, the higher the increase. Not wearing a seat belt, for example, could result in a 5.8% increase. A more serious offense, like a DUI, will increase your premiums up to 71%.

Why Luxury Vehicles and Sports Cars Cost More to Insure

Due to their high-end costs and the risk they may represent, luxury vehicles and sports cars pay higher insurance premiums. Most of these cars are equipped with powerful engines able to reach high speeds in seconds. Underwriters may view these features as a potential risk. Also, repair costs are taken into account — and as expected with high-end cars, they’re pricey.

It turns out that between luxury vehicles and sports cars, the owners of the latter will always pay more because of risk. Lots of horsepower, expensive parts, and theft rates are just some of the factors that drive up these premiums. “For those who own sports cars and place them in our marketplace, we find that their premiums tend to be 10 to 50% higher than for similarly valued non-sports vehicles,” said Matt Sweetwood, CEO at LUXnow, a community marketplace that rents luxury cars.

New cars are also more expensive to insure because they may be equipped with the latest technology that will be costly to repair in the event of an accident.

“I think the car does have an influence on what the insurer is charging for an insurance premium,” said David Zuby, chief research officer for the Insurance Institute for Highway Safety. “Many insurers are looking very carefully at how a car’s characteristics, whether that’s the fitment of safety systems or other aspects of it, affect risk and then take that risk into their insurance cost calculations,” he added.

timeline that displays the history of auto insurance in the united states

Your Auto Insurance Questions Answered

What does it mean when I see numbers like 50/100/50 on my policy?

These numbers represent limits to your insurance, meaning the total amount that your insurer will cover on your behalf. The numbers are in the thousands and are usually ordered the following way: Bodily injury per person ($50k), bodily injury per accident ($100k), and property damage ($50k).

What’s the minimum auto insurance I am legally required to have?

Since auto insurance is regulated at the state level, the minimum amount will depend entirely on your place of residence. The Insurance Information Institute has a list with the auto financial responsibility laws detailed by state and dollar amount.

What’s the difference between an insurance agent and an insurance broker?

An agent typically represents an insurance company, while a broker represents a buyer. Which one could benefit you will depend on your insurance needs. Also worth noting is the difference between captive and independent agents. While a captive agent is paid a salary and works for only one insurance company, an independent agent works in a freelance capacity for various companies.

We urge you to research first before making any commitments.

Will my insurance premium increase if I’m involved in an accident?

This all depends on your policy’s fine print. That said, if you are the at-fault party, there’s a high probability that your premium will go up.

How can I pay less for an auto insurance policy?

The best way to save is to shop around for the coverage you need at the lowest rate. Other ways to save include increasing your deductible if you’re a safe driver and bundling two kinds of insurance — like auto and home — under one company. Most auto insurance companies also have additional discounts for which you may be eligible, as well as programs that monitor just how safely you drive. A combination of these may lower your premium.

What’s the risk of having just a bare-bones policy?

If the damages of an accident for which you are at fault exceed the amounts stipulated on your policy, you will be held liable and have to pay the difference. In the unfortunate event that you don’t have the resources to pay these out-of-pocket expenses, you might be putting assets like your home at risk.

What’s an umbrella policy and how can it help me?

Umbrella insurance may grant you more protection if and when your traditional insurance policies (auto, home) have reached their limits. Umbrella policies usually have higher limits, and as such are designed to add an extra layer of safety for you and your assets.

More Details On Our Methodology

We started our research into the best auto insurance companies in the nation with a list of 23 of the top auto insurers. These were featured both in the NAIC’s 2019 Property/Casualty Market Share report for the Private Passenger Auto category and J.D. Power’s 2019 U.S. Auto Claims Satisfaction study.

We evaluated these 23 companies based on their number of direct premiums written over the last year, their A.M. Best rating, market share, and cumulative market share for private passenger auto insurance in the U.S.

Additionally, we looked up each of the companies and their respective subsidiaries in the NAIC’s database to get their total number of complaints under the private passenger auto insurance category.

We then proceeded to add the share of complaints percentage of each one, as well as the share of premiums percentage within the U.S market. Finally, we divided the total share of complaints by the share of premiums to get the complaint ratio percentage, discarding companies with a complaint ratio of over 1.00%, since that is the national average according to the NAIC. Once we evaluated all of these factors, we were able to narrow our list to 15 companies.

We then researched our preliminary picks, looking into their coverage options, the ease of their claims process, customer support, deductibles, complimentary perks, and special features.

Due to state laws requiring minimum liability insurance for drivers, most companies offer the same types of coverages: liability, comprehensive, and collision. That means insurers have to differentiate themselves through supplemental policies, features, and add-ons that enhance their policyholders’ coverage and protection. We paid special attention to these additional features.

After taking into account all the above factors, we cut our list down to five top auto insurance companies. We also put together a list of four companies that provide noteworthy services.

We ranked the companies on our list based on the following factors:

Financial Stability

If your wellbeing is ever dependent on an insurance company paying you the amount stated on your policy, you’ll want them to be on solid financial ground.

To verify the financial strength of our list of companies, we relied on AM Best ratings to shed some light on the matter. We also used NAIC’s 2019 data to evaluate any given company’s market share. If a company’s numbers weren’t up to par, they were automatically eliminated.

While insurance marketplaces don’t have financial strength ratings, they can still serve as useful tools for drivers looking for competitive premiums. Also, when considering a company that does not underwrite their own policies, make sure to look into the ratings of the insurer with which they’re partnering.

Discounts

One of the best ways of lowering your insurance premium is to qualify for any available discounts. Most auto insurance companies offer discounts of up to 30% to eligible policyholders. Discount percentages vary depending on location and some companies limit the number of discounts you can apply to your premium.

We took a close look at the discounts offered by the companies we researched. Many of them allow you to bundle different types of insurance policies together to pay less on premiums. For drivers who are only shopping for auto insurance, there are plenty of other savings opportunities depending on your profession, the kind of car you drive, how well you drive, etc. We favored companies with a wide range of alternatives that could result in a lower premium for drivers.

Technology

Auto insurance companies are employing the use of new technologies to remain relevant in an ever-changing industry, but also to provide better services. Most of the companies on this list use automation to provide quotes in a matter of minutes. Likewise, claims processes typically begin online or through mobile apps. These advances offer convenience if you need to file a claim after business hours.

Telematics is also playing an increasingly important role in auto insurance. This technology can be defined as a method of monitoring a car with GPS to record movements and location, as well as data from the engine, braking system, among others. This gives insurance companies valuable insights into the behavior and performance of insured drivers.

Drivers are usually given an upfront discount on their premium if they opt for a telematics policy. If the data indicates they’re good drivers, more discounts may become available to them over time.

Technology has become an indispensable part of every insurance provider’s quote and claims processes. Auto insurance companies that use these technologies ranked higher on our list.

Customer Experience

We paid special attention to each company’s claims satisfaction ratings based on J.D. Power’s latest report (2019). This resource gave us a better idea of which companies have a greater probability of fulfilling a claim to the policyholder’s satisfaction.

Accessibility was another big factor. The ways in which a company provides support is telling of their dedication to their clientele.

With that in mind, we looked into the different platforms through which auto insurance companies provided the best customer support. Most offer assistance through phone, email, and agents. Others went further by providing live online chat, 24/7 support via mobile app or call center, and social media responsiveness after business hours and during weekends.

Accidents are unexpected, so being insured with a company that’s available around the clock could be more of a necessity than a convenience for many. We ranked these practices highly.