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Published: Jun 29, 2022 37 min read
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Best for Customizable Premiums
Best for Young DriversBest Car Insurance PackageBest for Essential Worker and First Responder DiscountsBest for Flexible Policies
ProgressiveState FarmAmica FarmersNationwide
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Discounts

Bundling, multiple vehicles, installing anti-theft devices, automatic and paperless statements, loyalty rewards, teen driver discounts

Bundling, multiple vehicles, Drive Safe & Save telematics program, defensive driving course completion, vehicle safety features

Bundling, paperless, up-front payments, AutoPay, good driving, young drivers, having anti-theft devices, loyalty and legacy discounts

Bundling, good student and students away from home, automatic, paperless, on-time payments, shared family car, anti-theft, anti-lock brake and passive restraint systems, hybrid/ electric vehicles, military members and essential service professionals

Bundling, vehicle safety and anti-theft devices, automatic and paperless billing, safe driver rewards, defensive driving course completion, good student driver (ages 16-24)

Tools

Mobile app, Name Your Price tool, car insurance calculator, Snapshot tool

Mobile App

Mobile app, Car Connection tool

Mobile App

Mobile app, SmartMiles, Smart Ride

Best for Customizable Premiums
Progressive
Our Partner
See an Estimate
Discounts

Bundling, multiple vehicles, installing anti-theft devices, automatic and paperless statements, loyalty rewards, teen driver discounts

Tools

Mobile app, Name Your Price tool, car insurance calculator, Snapshot tool

Best for Young Drivers
State Farm
Our Partner
See an Estimate
Discounts

Bundling, multiple vehicles, Drive Safe & Save telematics program, defensive driving course completion, vehicle safety features

Tools

Mobile App

Best Car Insurance Package
Amica
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Discounts

Bundling, paperless, up-front payments, AutoPay, good driving, young drivers, having anti-theft devices, loyalty and legacy discounts

Tools

Mobile app, Car Connection tool

Best for Essential Worker and First Responder Discounts
Farmers
Our Partner
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Discounts

Bundling, good student and students away from home, automatic, paperless, on-time payments, shared family car, anti-theft, anti-lock brake and passive restraint systems, hybrid/ electric vehicles, military members and essential service professionals

Tools

Mobile App

Best for Flexible Policies
Nationwide
Our Partner
See an Estimate
Discounts

Bundling, vehicle safety and anti-theft devices, automatic and paperless billing, safe driver rewards, defensive driving course completion, good student driver (ages 16-24)

Tools

Mobile app, SmartMiles, Smart Ride

Whether you’re looking to switch insurers or you’re buying car insurance for the very first time, there are several factors to keep in mind when trying to find the right coverage for your vehicle.

Read on for our reviews of the best car insurance companies and our comprehensive guide to choosing the right policy (and insurer) for you.

Our Top Picks for Best Car Insurance Companies of July 2022

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Why we chose it: We chose Amica Mutual as the best car insurance package due to its Platinum Choice Auto policy, where drivers can earn Advantage Points rewards and save considerably on their deductible.

Pros
  • 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
Cons
  • No rideshare insurance
  • Not all features are available nationwide
  • Coverage is not available in Hawaii
HIGHLIGHTS
A.M. BEST RATING
A+
J.D. POWER RATING
Above average (895/1,000)
NAIC Complaint Index
Below median (0.66)

While Amica is by no means the least expensive option available, it does boast high customer satisfaction overall in the J.D. Power Auto Insurance Customer Satisfaction study, and has had the highest score in the New England region for nine years in a row.

Aside from its low NAIC complaint ratio (common issues are rate increases and delays in claims handling), Amica also received a solid score of B+ in the CRASH report card for 2022, in which collision repairers rate insurers based on policy handling and payment practices.

Amica's basic coverage options include personal injury protection, property damage, bodily injury liability and uninsured/underinsured motorists. Other policy options include auto loan/lease gap protection, comprehensive and collision coverage, roadside assistance and rental reimbursement.

It also features one of the most robust car insurance packages we found, the Platinum Choice Auto. This package 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.

Amica's Platinum Choice also includes credit monitoring, a $5,000 rental coverage maximum and new car replacement if you total your car (provided it’s less than a year old and has fewer than 15,000 miles).

Beyond Platinum Choice Auto, Amica offers some common coverage options with which to customize your auto insurance policy, including glass repair without a deductible and guaranteed asset protection (gap) coverage for when you owe more than the depreciated value of a totaled car

Amica car insurance discounts

  • Bundling policies and insuring multiple vehicles
  • Paperless payments, up-front premium payments and AutoPay
  • Good driving habits: being claim-free for three years and taking a defensive driving course
  • Young drivers: for completing a training program, students with good grades and full-time students away at school
  • Having anti-theft devices, passive restraint or electronic stability features
  • Loyalty discounts after two years of being insured
  • Legacy discounts for drivers under 30 whose parents have been insured with Amica for at least five years

Amica car insurance tools

  • Mobile app: track claims, request roadside assistance, pay bills
  • Car Connection tool for comparing prices on new and used cars

Why we chose it: We chose Progressive as the best car insurance for customizable premiums because of its Name Your Price tool, which allows drivers to shop for coverage according to their budget.

Pros
  • Save on your premium by signing up for the drive-monitoring program
  • Look for premiums within your budget with their Name Your Price tool
  • Compare quotes with Progressive's comparison tool
  • Loyalty Reward program
Cons
  • Pricing may vary depending on whether you buy online or over the phone
  • Discounts vary and are not available in all states
HIGHLIGHTS
A.M. BEST RATING
A+
JD POWER RATING
Below average (862/1,000)
NAIC Complaint Index
Above median (1.03)

Progressive offers the most control when it comes to how much you want to pay for your auto insurance policy. It does this through its Name Your Price tool, which reverses the usual method of getting an insurance quote. By providing some basic information (address, vehicle make and model, owned or leased) and how much you can spend, and Progressive will show you policy options within your budget.

Further, Progressive offers a good array of discounts, some of which depend on how you purchase the policy — such as for an online quote or signing online — and others that depend on where you live. You can reduce your premiums even further by installing the company’s Snapshot app, which monitors your driving habits and gives you feedback on safe driving.

Coverage options with Progressive include liability, comprehensive, medical expenses, collision and uninsured/underinsured motorist coverage. You can also add roadside assistance, gap, rental car reimbursement, custom parts and rideshare coverage.

While Progressive achieved a higher than average J.D. Power Auto Insurance Customer Satisfaction score in California, it ranked about average in other regions of the country. . Likewise, its rates are often middle of the road for the industry.

Progressive car insurance discounts

  • Combine your auto insurance policy with home, renters or life insurance
  • Insure multiple vehicles
  • Vehicle safety features such as anti-theft alarms
  • Automatic and paperless payments
  • Loyalty rewards by maintaining continuous coverage with Progressive
  • Teen driver discounts: full-time students with good grades and students away from home

Progressive car insurance tools

  • Look for coverage options within your budget with the Name Your Price tool
  • Car insurance calculator based on your state and personal details
  • Get personalized rates with Snapshot, a usage-based insurance program (not available in California or North Carolina)
  • Mobile app: view your driving status, recent trips and ways to improve your driving

Why we chose it: We chose State Farm as the best car insurance for young drivers because it offers teenage student drivers with a GPA of 3.0 or higher up to 25% savings.

Pros
  • Offers rideshare insurance in most states
  • Save money with Drive Safe & Save and Steer Clear programs
  • Travel expenses coverage
Cons
  • Drive Safe & Save program not available in CA, MA or RI
HIGHLIGHTS
A.M. BEST RATING
A++
JD POWER RATING
Above average (892-1,000)
NAIC Complaint Index
Below median (0.67)

State Farm offers great savings for teenage drivers with discounts for good grades, being away at school, taking driver training (up to 20%) and good driving habits.

State Farm’s travel expenses coverage pays for meals, transportation (home or to your destination) and lodging if your vehicle is disabled 50+ miles from your home in an accident covered by your comprehensive or collision insurance. A return trip to pick up your car is also covered.

Additional coverage options from State Farm include liability, uninsured/underinsured motorist, medical payments, roadside assistance and rideshare (if you use your car for Uber or Lyft).

Customers who prefer in-person service can benefit from the company’s 19,000 agents, a rarity in the industry, even among insurance giants. This doesn’t mean that State Farm has neglected its online offering — its mobile app allows policyholders to request roadside assistance, pay bills and file claims from anywhere.

Finally, State Farm was the highest ranking car insurer in J.D. Power’s 2021 Auto Insurance Customer Satisfaction report in New York, Florida and the entire Northwestern region.

State Farm car insurance discounts

  • Bundling with renters, homeowner’s or life insurance policies
  • Insuring multiple vehicles
  • Drive Safe & Save telematics program rewards you for good driving habits
  • Defensive driving courses (in select states)
  • Vehicle safety features (seatbelt, airbags on older vehicles)

State Farm car insurance tools

  • Mobile app: pay bills, file claims, request roadside assistance, view ID cards and link your bank account
  • Make car reservations through Enterprise or Hertz
  • Directory of reliable auto repair shops

Why we chose it: We chose Farmers as the best car insurance for essential workers due to its array of discounts tailored specifically for teachers, healthcare workers and other first responders.

Pros
  • Guaranteed Value coverage pays out an "agreed value" if your car is totaled
  • Multiple discount categories
  • First major insurer to offer a discount for alternative-fuel vehicles
Cons
  • Discount eligibility and percentage varies depending on your place of residence
  • Does not offer gap insurance to provide the total replacement cost of a new car
HIGHLIGHTS
A.M. BEST RATING
A-
JD POWER RATING
Above average (893/1,000)
NAIC Complaint Index
Below median (0.81)

Farmers offers a broad range of insurance products and ways to save on car insurance premiums, which is especially useful in counterbalancing its slightly higher than average rates.

While the company does not provide a more extensive selection of car insurance discounts than other insurers, it does offer two car insurance discounts not all providers carry. For starters, essential workers — doctors, nurses, firefighters, teachers and police officers — are eligible for a premium reduction, a benefit few insurers provide.

Farmers also provides multiple car and home insurance discounts for veterans, active duty service members, and honorably discharged military members. While the exact amount of its bundling discount may vary by state and type of policy, the savings are generally substantial for combining auto and home insurance.

Farmers standard coverage options include liability, property damage, collision, comprehensive coverage, uninsured/underinsured motorist, medical payments and personal injury protection.

Additional coverage types include rideshare, loss of use, rental reimbursement and roadside assistance. Owners and collectors of classic vehicles will also appreciate Farmers' coverage of up to $750 on spare parts.

Farmer’s has a low ratio of complaints filed with the National Association of Insurance Commissioners, and overall gets good feedback about its customer service. Its 48,000 agents cover all 50 states (not in the District of Columbia). It was awarded Second Best in the Central region in the 2021 J.D. Power Auto Insurance Customer Satisfaction study.

Farmers car insurance discounts

  • Bundling insurance policies and insuring multiple vehicles
  • Student discounts for good grades and studying away from home
  • Automatic, paperless and on-time payments
  • Shared family car (not available in California)
  • Anti-theft, anti-lock brake and passive restraint systems
  • Hybrid/electric vehicles or those powered by other alternative fuels (only in California)
  • Discounts for military members and other essential service professionals

Farmers car insurance tools

  • Mobile app: chat with an agent, request roadside assistance, get a quote
  • Specialty insurance options like motorcycle and boat insurance

Why we chose it: We chose Nationwide as the best car insurance for flexible policies due to its On Your Side Review, a free yearly insurance assessment in which drivers can review their current policy, ask questions, make changes and apply for discounts.

Pros
  • Get discounts with the SmartRide safe driving app
  • Pay based on how many miles you drive
  • Get up to a $500 cash bonus with the purchase or lease of a qualified new car or vehicle
Cons
  • SmartRide and SmartMiles discount availability vary per state and coverage selected
  • Accident forgiveness is not available in all states
HIGHLIGHTS
A.M. BEST RATING
A+
J.D. Power Score
Below average (876/1,000)
NAIC Complaint Index
Below median (0.39)

Nationwide offers its policyholders a free annual car insurance assessment called On Your Side Review. While all insurers let you reconsider your policy at any time, this scheduled review encourages customers to clear up any questions regarding their policy and benefits, make changes to their coverage in line with current and future needs, and apply for any available discounts.

Aside from the On Your Side Review, Nationwide also features two discount programs that take driving habits into account: SmartRide, a usage-based option for good drivers, and SmartMiles, designed to reduce rates for low mileage drivers.

The insurer offers standard coverage options such as collision and comprehensive insurance, gap insurance, uninsured motorist, bodily injury liability, roadside assistance and policies designed specifically for young drivers and classic car owners.

Its list of discounts is a bit more limited than those of other companies, but you can lower your monthly premiums by bundling insurance policies, setting up direct payments, driving fewer miles and staying accident-free. And, despite the industry standard of dramatically increasing rates when adding teen drivers, Nationwide’s price hikes are lower than average. It also offers several tiers of protection for teens on their parents’ policy, and will give discounts for kids who take safe-driving courses.

Nationwide car insurance discounts

  • Save an average of $646 when bundling auto and home insurance
  • Vehicle safety and anti-theft devices
  • Automatic and paperless billing
  • Safe driver rewards for customers who go five years without major violations or at-fault accidents
  • Complete a defensive driving course
  • Good student discounts for drivers aged 16 to 24

Nationwide car insurance tools

  • Mobile app: manage insurance policies, make payments, file and track claims and request roadside assistance
  • SmartMiles, a pay-per-mile car insurance program for low-mileage drivers
  • SmartRide, a usage-based car insurance program for safe drivers

Why we chose it: Aside from the typical features found in most car insurance mobile apps (access digital insurance cards, request roadside assistance and file claims), GEICO’s app also connects to CARFAX, allowing you to see your vehicle’s service history, create a maintenance schedule and check for open recalls, among others.

Pros
  • Pay bills or request roadside assistance with the Mobile app
  • Coverage calculator
  • Discounts available to federal and military employees, seniors and students
Cons
  • Accident Forgiveness not available in CA, CT and MA
  • Does not offer gap insurance
HIGHLIGHTS
A.M. Rating
A++
J.D. Power Rating
Above average (881/1,000)
NAIC Complaint Index
Below average (0.69)

Though GEICO has a reputation for being one of the most affordable car insurance providers in the nation, the company stands out with its easy-to-use mobile experience.

GEICO’s mobile app — which has an excellent 4.8 out of 5 rating with almost three million reviews in Apple’s App Store — allows customers to access their digital insurance cards, request roadside assistance, submit photos of their cars for damage estimates, and connect with a virtual assistant to answer car insurance-related questions, among other features.

As for coverage options, GEICO offers medical payments, personal injury protection, uninsured/underinsured motorist, collision and comprehensive coverage. Add-ons include roadside assistance, rental reimbursement and mechanical breakdown insurance products. The latter can cover repairs after your new car warranty expires. GEICO is also one of only two companies on our list with a dedicated discount for military members.

GEICO offers competitive pricing for two age tiers that are often expensive to insure: teens and seniors. And good drivers can benefit from the company’s usage-based program, DriveEasy.

GEICO’s complaint ratio is below the national average, standing on par with others on our list. It also did better than the median in New England, California, and Central in JD Power’s Auto Insurance Customer Satisfaction study for 2021.

GEICO car insurance discounts

  • Equipment discounts for new cars, airbags, anti-lock brakes, anti-theft systems and others
  • Being accident-free for five years
  • Using a seatbelt, taking defensive driving or driver's education courses and being a good student
  • Affiliation discounts for military members and federal employees
  • Insuring multiple vehicles and having multiple policies
  • Senior driver discounts for drivers over 50

GEICO car insurance tools

  • Mobile app: access ID cards, pay bills and request roadside assistance or customer support 24/7
  • DriveEasy telematics program rewards safe driving behavior
  • Car insurance coverage calculator

Why we chose it: We chose Allstate as the best car insurance for usage-based insurance programs, which allows policyholders to save by driving safely and by driving short distances or infrequently.

Pros
  • Get driving insights and discounts for safe driving with Drivewise
  • Safe Driving Bonus for every 6 months you're accident-free
  • Get discounts for new cars and teen drivers
Cons
  • Drivewise program not available in every state
  • Premiums vary depending on whether you buy online or through a local agent
HIGHLIGHTS
A.M. Best Rating
A+
J.D. Power Rating
Below average (870/1,000)
NAIC Complaint Index
Above median (1.41)

Allstate's telematics program, Drivewise, offers policyholders a chance to get cashback every six months by driving safely, plus an additional reward for signing up. Allstate also offers Milewise, a pay-per-mile insurance option that could help infrequent drivers and those who only travel short distances save from 20% to 70% on premiums.

Allstate has high social media responsiveness on platforms like Twitter, replying directly to users on weekends. Additionally, its website provides easy-to-use tools to help customers understand their policy and determine how much coverage they need.

Coverage options with Allstate include collision, comprehensive, liability and medical payments, uninsured motorist, sound systems, roadside assistance, personal injury protection, rental reimbursement and extended umbrella coverage.

Some areas for concern with Allstate are its poor customer satisfaction scores, in both of J.D. Power’s 2021 studies (Claims Satisfaction and Auto Insurance Customer Satisfaction), as well as its high complaint ratio in the NAIC index — the highest of any on our list.

Allstate car insurance discounts

  • Vehicle equipment discounts for new cars, anti-lock brakes and anti-theft devices
  • Multiple policies
  • Safe driving
  • Signing your policy seven days before it becomes effective
  • Not missing any payments for a year
  • Discount for students with good grades, those who study away from home and complete a driver's education program
  • Automatic payments, full payments and paperless billing

Allstate car insurance tools

  • Mobile app: access ID cards, pay bills, report claims, request roadside assistance and accident support
  • Drivewise, a usage-based insurance program
  • Milewise, a pay-per-mile car insurance program
  • Bumper-to-Bumper Basics, a tool for selecting the right coverage limits and deductible

Why we chose it: We chose USAA as the best car insurance company for military families and veterans due to its high customer satisfaction ratings, according to J.D. Power's 2021 Auto Insurance Claims Satisfaction Study.

Pros
  • The highest overall customer satisfaction rating out of the companies we reviewed
  • Offers family discount for members whose parents were customers of USAA
  • Available in all 50 states, including Washington, D.C.
Cons
  • Not available to civilians
  • Offers fewer specialty coverages compared to other car insurance providers
HIGHLIGHTS
A.M. Best Rating
A++
J.D. Power Rating
Highest Overall (909/1,000)
NAIC Complaint Index
Above median (1.06)

Although USAA is only available for active military, veterans and their families, it is ranked highly for providing top-notch customer service to its members. Indeed, if the company had met J.D. Power’s criteria for its Auto Claims Satisfaction Study of 2021, it would have achieved the top position. It would likewise have left every other insurer in the dust in the 2021 J.D. Power Auto Insurance Customer Satisfaction study, in every region.

On the other hand, it does have a quite high number of complaints in the NAIC index, overwhelmingly focused on claims issues, from delays, to unsatisfactory resolutions or outright denials, and finally, adjuster handling rounding out the top four reasons.

Active service members can benefit from a vehicle storage discount of up to 60% while on deployment and up to 15% on comprehensive coverage when garaging their vehicles on base.

Coverage options with USAA include liability coverage, comprehensive and collision insurance, car replacement assistance coverage, accident forgiveness, rental reimbursement, towing and labor and rideshare gap protection.

USAA car insurance discounts

  • Safe driver discount for maintaining a good record for more than five years
  • Defensive driving discount for taking an approved course
  • Driver training discount for completing a basic driver training course
  • Good student discount for teenage drivers with good grades
  • New vehicle discount for a car that’s not over 3 years old
  • Multi-vehicle discount
  • Vehicle storage discount
  • Family discount
  • Length of membership savings
  • Military installation discount
  • Automatic payments

USAA car insurance tools

  • Mobile app: manage policy, get car insurance quotes, get auto ID cards and transfer funds
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Other companies we considered

We evaluated insurance companies based on their financial strength, discounts, technology and customer experience. The following insurers were close runners-up.

Erie

Pros
  • Above-average customer satisfaction rating with J.D. Power
  • Ability to lock-in rates until you change covered drivers, covered car or home address
Cons
  • It only operates in IL, IN, KY, MD, NY, NC, OH, PA, TN, VA, WV, WI and DC

Erie ranked above average in J.D. Power’s 2021 Auto Claims Satisfaction Study, making it one of the top-performing companies in customer service. Erie stands out, however, with its unique ERIE Rate Lock feature — which freezes your car insurance premium year after year, including after filing a claim.

Discounts with Erie insurance include a multi-policy discount, bundling home and auto, safe driving, paying annually upfront, first accident forgiveness, diminishing deductible option, vehicle storage, safety savings, paying a lump sum annually, and youthful drivers and college student discounts.

Liberty Mutual

Pros
  • Save up to 30% on your policy for safe driving with the RightTrack app
  • Get a discount on your hybrid or electric vehicle
  • Get a better price when you purchase your policy online
Cons
  • Second highest NAIC complaint ratio out of all insurers on our list
  • Accident forgiveness not available in CA

Like other insurers, Liberty Mutual offers various discounts. Unlike others, however, it doesn’t limit the number of discounts you may be eligible for, a feature that could considerably reduce your premium. The company’s website also has a coverage calculator that can help you determine the right level of protection for your vehicle.

Discounts available with Liberty Mutual include: bundling policies, multiple cars, homeownership, military, good student, student-away-at school, paying-in-full, going paperless, driving safely and more.

Liberty Mutual’s coverage options start with the basics: medical expense payments, uninsured motorist, personal injury protection, liability coverage, collision and comprehensive. Other available coverage options are roadside assistance, gap coverage, rental reimbursement and insurance for teachers who store valuable supplies in their cars.

Travelers

Pros
  • Features two accident forgiveness plans
  • Intellidrive program can reduce rates by as much as 20%
  • Optional Premier New Car Replacement combines new car replacement, loan/lease gap coverage and a glass deductible
Cons
  • High NAIC Complaint Index compared to other insurers
  • Rideshare coverage only available in CO and IL
  • Coverage, discounts and deductibles not available in all states

Travelers can give you a quote in five minutes or less; you don’t even have to provide a driver’s license number. If you request your car insurance quote while you’re still insured with another company, you’ll receive a discount of up to 10%.

Policyholders must connect with an insurance representative or independent agent to learn more about Travelers insurance products. Should you have to report an accident, the insurer has over 12,000 claims professionals nationwide available 24/7.

Travelers' coverage options include liability, collision, comprehensive, personal injury protection and medical expenses. It also offers additional coverage options like loan/lease gap coverage, rental reimbursement, accident forgiveness, new car replacement and roadside assistance. Rideshare coverage for Uber or Lyft drivers is only available in Colorado and Illinois.

QuoteWizard

Pros
  • One-stop shop to compare various top insurance providers at the same time
  • Users can compare other types of policies such as home, renters and life insurance
Cons
  • Doesn't offer quotes, the website redirects you to lender websites
  • May share information you provide with lenders and other third parties

QuoteWizard is a great place to compare car insurance quotes from different providers without doing all the legwork. As a marketplace, it allows prospective customers to compare auto insurance quotes and double-check coverage details before committing to one insurer.

Keep in mind that average car insurance rates as advertised by QuoteWizard will vary depending on the coverage options you select. You will also need to verify whether your coverage limits comply with the minimum liability requirements in your state, as the site does not offer this information.

Spark Auto Insurance

Pros
  • Nationwide provider network
  • Partners with other auto insurance companies
  • Allows drivers to compare coverage from comparing multiple companies
Cons
  • Requires you to enter personal information before connecting you with its provider network
  • Not rated by A.M. Best or J.D. Power

Spark Auto Insurance is an online marketplace designed to connect potential customers to an extensive network of insurance providers.

This network of providers offers standard and optional coverage options, such as bodily injury liability, damage liability, collision, comprehensive, personal injury, medical payments and underinsured motorist, among others.

Spark Auto Insurance works with reputable insurance companies like Liberty Mutual, Travelers and Safeco. As a marketplace, the company will allow you to compare various insurance providers and help you save with numbers that fit your particular situation.

Car Insurance Guide

In this section, you will learn what auto insurance covers, the types of coverage most companies offer and what can raise (or lower) your monthly premium.

We also include a step-by-step guide on buying car insurance and explain why car insurance is worth your money.

Table of Contents

How does car insurance work?

Auto insurance is a form of financial protection against theft, collision and liability involving your vehicle. In simple terms, you pay premiums to an insurer, and it pays for any losses as stipulated in your policy, which generally includes damage to other vehicles and injury to the persons involved.

It does not typically cover property within your vehicle, however. For example, if your car is broken into and your laptop is stolen, the insurer pays for replacing the window and any other damage done to the car, but not the computer. In order to cover that, you would need homeowners or renters insurance.

Types of car insurance coverage

There are six standard components of car insurance coverage:

  1. Liability insurance includes property damage and bodily injury liability; the latter covers medical expenses to others stemming from an at-fault accident.
  2. Uninsured/underinsured motorist coverage covers medical bills and repairs if you’re in an accident caused by another driver with little or no insurance.
  3. Comprehensive coverage covers repairs if your vehicle is damaged by something other than another vehicle (including hail, fire, floods, theft and vandalism).
  4. Collision coverage covers repair costs to your vehicle if you're involved in a car accident that is deemed to be your fault.
  5. Medical payments coverage covers medical expenses if you or your passengers are injured in an accident.
  6. Personal injury protection (PIP), also known as no-fault insurance, covers medical bills, loss of wages and funeral costs for you or your passengers if you're in an accident, regardless of who is at fault.
  7. Guaranteed asset protection (GAP), supplements your car insurance when you owe more on the car than its cash value. In those cases, the difference isn’t covered by your regular policy.

Consider optional insurance riders if you need additional coverage such as roadside assistance, glass replacement and rental reimbursement.

How much is car insurance?

Car insurance cost $1,204 on average in 2019 according to The National Association of Insurance Commissioners (NAIC)’s 2018-2019 Auto Insurance Database Report. However, this can vary greatly depending on a wide range of considerations. In fact, the NAIC explicitly mentions that state-to-state comparisons are difficult to make because of the high degree of variance on insurance requirements and other factors.

While your driving record and the type of car you drive influence your premium, there are other factors that affect what you pay for car insurance. Broadly speaking, the higher the risk you seem to present for an insurer, the higher the premium will be.

Common factors that increase premiums:

  • Car usage: if you don’t drive often, there are fewer chances you’ll be involved in an accident. The opposite is also true; the more you drive, the more likely the insurance company has to pay out a claim, which leads to higher premiums.
  • Place of residence: where you live influences your car insurance premium. Generally, metropolitan areas like New York City, for instance, have higher vehicle theft and vandalism rates compared to rural neighborhoods, which means a higher risk.
  • Age: drivers under the age of 25 usually pay higher premiums because insurers see inexperience as a contributing factor in accidents. Teenagers, therefore, are considered a high-risk drivers and will often have to pay the highest premiums.
  • Gender: statistically speaking, women are involved in fewer car accidents than men, resulting in lower premiums.

What drives up car insurance premiums?

Your car insurance costs will depend on the following:

  • Marital status: insurers consider married drivers as safer and more financially stable than single drivers.
  • Commute: Insurers ask for mileage information, such as how many miles you drive a year, because longer commutes increase your risk of being in an accident, since you spend more time on the road. Some companies implement specific caps to determine whether your car is what’s known as a pleasure vehicle (around 7,500 a year or 20 miles a day), and offer lower rates.
  • Homeowner status: homeowners are considered more financially stable than renters.
  • Owning luxury or sports vehicles: these cars cost more to repair, have higher vehicle theft rates and lots of horsepower, which makes them costlier to insure.
  • Accidents or tickets: these can hike up your payments for three years or longer. The worse the offense, the higher the increase.
  • Insurance coverage: your coverage limit and deductible can drive up the cost of your premium.
  • Credit score: many insurers use credit-based insurance scores to price policies. Statistical data reveals that drivers with poor credit are more likely to file insurance claims.

How to lower your car insurance premium

Bundle insurance policies

On average, bundling can save you 8% on your combined premiums. Consider one of our best homeowners insurance providers if you're looking to bundle auto and home.

Increase your deductible

The deductible is the portion of damages you’ll have to pay out of pocket before the insurance company pays the rest.

Review your policy regularly

Reassessing your current policy annually before renewal, or whenever you make life changes that affect who is driving your car, can ensure you’re getting the type and level of coverage you need and can afford.

Apply for discounts

Companies offer discounts to policyholders that maintain a clean driving record and drive vehicles with good safety features.

Although discounts vary from one lender to the next, they often include:

  • Bundling policies with the same company
  • Insuring multiple vehicles
  • Taking a drivers education course
  • Automatic and paperless payments
  • A higher deductible
  • Maintaining continuous coverage
  • Safe driving
  • Student driver with good grades
  • Low annual mileage
  • Students away at college
  • Vehicle safety features

Reduce coverage on old cars

You can reduce your premium by dropping collision or comprehensive coverage on vehicles older than 10 years. Similarly, you might consider dropping collision coverage on cars you don't use or have in storage.

Consider usage-based insurance

Usage-based insurance options take your actual driving history to calculate your premium.

For example, pay-per-mile insurance can help infrequent or short-distance drivers save 20% to 40%, while pay-how-you-drive insurance could help good drivers save up to 40%, plus a discount for signing up.

Usage-based insurance options that measure how fast you drive, how quickly you turn and how abruptly you break could end up costing you more if you don't drive safely.

UBI could also be an option for those looking to buy car insurance with bad credit.

Shop for rates

Shopping around and comparing price quotes from at least three different insurance providers can help you get the cheapest car insurance rate for your needs, without sacrificing important coverage. Using a car insurance comparison tool can help match you with a provider that offers the best car insurance policy for your vehicle.

You can get rate quotes directly from insurance companies online or over the phone. Some state insurance commissioners also provide information on average car insurance prices in your state.

Besides average rates, consider available discounts, coverage limits and deductible options when shopping for coverage. If you don’t know where to start, an independent insurance agent or broker could help you narrow down your choices.

If you want to read more about savings opportunities with online insurers, read our guide on the best cheap car insurance companies.

Finally, check out our article on how to lower your car insurance premiums for more ways to save on auto policies.

How to get car insurance

You need your driver's license and vehicle registration to purchase car insurance. You will also need a copy of your existing insurance declaration page if the vehicle is already insured.

Here are some additional tips on how to buy car insurance:

  • Shop around for the best annual premium.
  • You don't want to be underinsured. Some minimum coverage requirements tend to be low and may not cover you sufficiently in the event of a serious accident.
  • Look for policy discounts and other ways to save.
  • Decide on a deductible.
  • Taking a driving course can help if you have a DUI on your record.

Is car insurance worth it?

Car insurance is mandatory in all states with the exception of Virginia and New Hampshire, so most auto owners don’t have much of a choice in whether to insure their vehicle.

Since it's mandatory, driving while uninsured is considered a misdemeanor and will result in a fine of anything between $50 to $1,500 depending on the state. It can also result in jail time of up to five years in some states. Given that the average car insurance premium is $1,190, it’s easy to see how it’s definitely worth it.

Latest news in car insurance

While you can’t change some of the factors that influence your auto insurance rates, such as your age and gender, other factors are within your control. Read our guide on ways to lower your car insurance premiums and find out how making the right choices can help you save.

In some car and home insurance related news for residents of Washington state, a new law will ban the use of credit scores to set car and home insurance rates. Similar laws exist in Hawaii, California, Michigan, Massachusetts and Maryland. Insurance companies argue that this will lead to higher premiums for drivers.

According to recent data, 82% of new car buyers in January paid more than sticker price due to vehicle shortages and increased consumer demand. This trend will likely continue, as a massive chip shortage may run into 2023 and the war in Ukraine has resulted in disruptions of the global supply of neon gas.

However, if you’re still looking to buy a new car this year, Money’s guide on how to buy a car in 2022 has the best strategies to help you get the best price.

Lastly, experts say the recent increase in road fatalities on U.S. roads will mean higher car insurance rates for drivers in 2022.

Car Insurance FAQ

How does car insurance work?

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Car insurance is designed to cover vehicle repair costs and medical expenses for you and your passengers after an accident.

Some car insurance coverage options also pay for expenses related to injuries or property damage caused to others or provide additional protection if you're in an accident caused by someone who doesn't have insurance or has insufficient coverage.

What does full coverage car insurance cover?

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Full coverage auto insurance refers to a combination of liability, collision and comprehensive coverages. These coverage options financially protect drivers from damages to their vehicle, injuries to passengers, and any damages to other cars and their occupants.

What is liability car insurance?

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Liability car insurance covers drivers in the event of an at-fault accident. In most states, this type of coverage is a requirement. Liability insurance consists of bodily injury liability coverage and property damage liability coverage.

Bodily injury liability protects drivers if they're at fault for an accident by covering the other driver's medical expenses or their passengers.

Property damage liability, on the other hand, protects at-fault drivers by covering the cost of the other person's property repairs.

How to lower car insurance costs

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There are a variety of ways you can try to lower your monthly car insurance rate. The main way to get a better price for your car insurance is to shop across insurers and compare multiple quotes. Asking friends and family for feedback on insurers that worked for them can be useful.

Finally, pay special attention to the insurer's discounts, and which apply to you. If you're a safe driver or don't drive often, a usage-based insurance program could also help you save. Finally, you can also lower your monthly premium by increasing your deductible and improving your credit score.

What is the best car insurance?

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The best car insurance company for you will be the one that best fits your needs and budget.

That being said, Money's top pick for the best coverage package is Amica Mutual, which also garnered the highest overall customer satisfaction rating awarded with J.D. Power.

We also consider Progressive to have the best offerings for customizable premiums and State Farm to have the best policies for younger drivers.

What is comprehensive car insurance?

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Although comprehensive auto insurance sounds like it provides coverage for everything, the truth is the name can be misleading and is often confused with "full coverage." Comprehensive coverage includes damage to your car not caused by another vehicle, such as theft, damage from fire, hail or vandalism.

The best car insurance companies provide what's called "full coverage," which refers to the combination of collision and comprehensive coverage. Although these two policies are optional, cars with both policies are considered "fully insured."

How We Chose the Best Car Insurance Companies

To find the best auto insurance companies in the nation, we vetted a total of 23 insurers featured on the NAIC’s 2020 Property/Casualty Market Share report for Private Passenger Auto as well as J.D. Power’s 2021 U.S. Auto Claims Satisfaction Study.

Since car insurance is regulated at a state level and most insurance providers offer the same coverage types across the board, our methodology only considered companies with few complaints against their private passenger policies as reported by the National Association of Insurance Commissioners (NAIC).

We also prioritized nationwide auto insurers with superior financial strength ratings, ample discounts, technology integration through telematics programs and above-average customer satisfaction scores from J.D. Power.

Finally, we looked at CRASH Network’s most recent report which rates insurers based on feedback from ​​1,100 automotive collision repair professionals, taking into account payment practices and policy handling. However, we found the helpfulness of this data was limited in scope, as most large insurers in general tended to have lower scores, with the top 32 picks comprised of smaller, more regional insurers.

  • Financial stability: when an insurer goes bankrupt, it typically sells its existing policies to other insurance companies. Make sure your car insurer is financially stable enough to pay out your claims when you need it by checking its AM Best rating.
  • Discounts: auto insurance policies beyond basic liability can be costly. Discounts could help you get the coverage you need without breaking the bank.
  • Technology: most of the companies on our list use automation to provide auto insurance quotes in a matter of minutes and have a 24/7 claims process. Car insurance companies that allow policyholders to file car insurance claims via apps ranked higher on our list.
  • Customer experience: filing a claim can be a hassle. To help you minimize the stress, we carefully considered companies based on customer satisfaction ratings as reported on J.D. Power's 2021 U.S. Auto Claims Satisfaction Study.

Summary of Money’s Best Car Insurance of July 2022