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When it comes to insuring your car you want to know that you have the best coverage possible. You want to feel confident that you will get the best service from your company in case of an accident.
The problem is, how do you filter through all the options of companies to find the perfect one for you. Every company has their own promises when it comes to saving you money and offering great service. Which one is the most transparent in their ads and not just adding fluff?
This is why we are here, to help you filter through the pile of companies to avoid to find the companies that are actually telling the truth in their ads.
We have compiled information to find which companies have the best customer reviews and offer the best rates for their quality service. Now all you have to do is contact your chosen company and sign the papers.
Here are The Smart Investor Select’s picks for the top car insurance companies:
Low prices are one of the things that made Progressive so popular among Americans that the company even encourages you to compare its rates with other insurance providers right on its website with a price comparison tool.
You will find the company provides standard car coverage options other insurers offer (like liability, personal injury protection, medical payments, etc.) and perks (like accident forgiveness, deductible reduction, etc.) when Progressive covers you. Of course, Progressive offers other insurance products like home, life, and renters through third party companies.
Allstate's customer convenience drive, discounts, and a wide range of coverages are probably responsible for its popularity among Americans. Allstate is also famous for its personalized support, and it even offers a customer satisfaction guarantee in terms of its claims process.
You should note, however, that the rates offered by Allstate are somewhat more expensive than the provisions of other top insurers. As long as you meet the requirements to partake of the discounts offered by the company, you will enjoy a more balanced rate with Allstate.
If you're a driver with a clean record, Allstate will treat you with fairly decent rates
GEICO provides lots of car insurance coverage options and is popular for its great customer service, as well as its great mobile app for customers. GEICO focuses on online sales to customers rather than the use of agents, which has given the company the ability to keep low rates coupled with providing similar products of other big insurers. Due to its pricing and convenience, it is known as the best option for consumers that are cost-conscious.
GEICO may come with some cons such as gap insurance absent, difficult getting a local agent, accident forgiveness not available in all states, and some coverage options missing. Overall, the company boasts to offer some of the best services such as excellent 3rd-party ratings, great mobile app, multiple Policy discounts, and new cars having mechanical breakdown insurance.
Erie insurance has incorporated technology as a crucial aspect of its business strategy. It has achieved this by implementing digitally organized bodies to check any veering off the path of its company’s terms and objectives to create a rich customer experience. The client's safety is of utmost importance, and strict safety measures are put in place to report any suspected attempt to defraud and prevent future attempts.
Erie insurance offers low and discounted prices as well as low premiums. The company provides discounts for seniors, youngers, and safe drivers to keep prices affordable. It has all the expected auto insurance standard plans and extra coverage loaded with various benefits specific to each state. The company has a series of unique extras and discounts which are largely unavailable in other insurance operations.
The products and services offered by USAA are specifically tailored for those who have served or are currently serving in the US military as well as their family members. So, if you’re not affiliated with the military of the United States, you should keep looking. Veterans and those currently enlisted will be able to make the most use of the available discounts and deals.
Similar to most insurance providers, you will find the standard coverage options, including liability, collision, and comprehensive coverage. Its extras and discounts are quite impressive as well. You will be treated to low rates and commendable customer service if you’re eligible for its membership.
Travelers offers the staple insurance products along with some coverage add-ons. While it is true that the rates are quite high when compared to other leading policy providers, the discounts offered by the insurer make the prices competitive.
If you are a safe driver, Travelers will prove to be a worthwhile insurance provider – however, if you don't have a clean motoring record, this company might not be so favorable – it is better you look for coverage elsewhere.
You can take advantage of quite a lot of bundling options with Nationwide that you won’t easily find with other insurance firms. Nationwide is great for you if you have a spotless driving record as you will be treated to some of the cheapest rates available.
However, if your driving history has some blemish, you might want to look elsewhere for coverage. Seniors will find this company more appealing than youngers as rates tend to get cheaper the older you get.
How Do Companies Determine Your Rate?
Insurance companies use different parameters to determine the insurance rates to charge their customers.
Why It's Difficult to Compare Auto Insurance?
Car insurance rates vary across insurance companies due to the different factors and statistical information they use when calculating premiums. Each insurance company has a unique formula that it uses to assess the customer's level of risk, the likelihood of getting an accident, and how much they can afford.
Some insurers attach higher weighting to certain factors, and this means that one driver may get different rates for the same coverage from two different insurers. Some of the factors that determine auto insurance rates include driving record, the model of your car, claims history, credit-based insurance score, age, and gender.
Also, insurance companies use different statistics to determine their base rates, and depending on the customer, the rate can vary by a small or large margin. Insurers collect data about millions of drivers and uses statistical information to identify characteristics of drivers who are more likely to cause accidents and make claims.
They group customers into categories depending on the age, occupation, experience, etc. If an insurer groups you in a high-risk customers' category, you will likely pay more for the coverage than customers in low-risk categories.
Knowing the factors that car insurers use to determine your rates can help you get the best rates.
Here are key factors that determine your premiums:
Insurance rates vary depending on your place of residence. Some locations have greater chances of vandalism and accidents than others.
For example, urban drivers are charged higher insurance rates due to their higher chances of getting involved in accidents than drivers in small towns with fewer cars on the road.
Your age, gender, and marital status can affect the insurance rate you get. Mature drivers are considered more experienced and less likely to cause accidents than teenage drivers and hence get lower rates.
Single people and male drivers are also considered to be at a higher risk of accidents and may get higher insurance quotes.
Luxury cars attract higher premiums due to the high cost of repair or part replacement. Also, cars that have a high risk of theft attract higher premiums to compensate for their higher risk.
If your car has safety features such as immobilizers, trackers and automatic braking systems, you may qualify for auto insurance discounts that lower your auto rates.
A record of reckless driving, DUI, speeding, accidents, road rage, and other unsafe driving habits have a big impact on the insurance rates you get. A good driving record can help you get favorable auto insurance rates and discounts.
Different auto insurance policies carry different rates. Also, some states have mandatory auto insurance requirements that may increase your insurance rates.
Examples of policies that may increase your rates include collision coverage, comprehensive policy, and personal injury protection.
Insurers may use a credit-based insurance score to assess your likelihood of filing a claim, and the estimated value of the claim. A high credit score may help you get a lower insurance quote.
How Do I Find The Best Insurance Quote?
Getting auto insurance can protect you from unexpected injuries, financial loss, or property damage due to traffic accident, theft or other insurable events. Here is how to get the best insurance quote:
Use auto insurance comparison websites
If you want to get the best rates for your car, take time to shop around and compare rates from multiple auto insurance companies.
Use comparison websites to find car insurance companies that meet your policy preferences.
Raise your deductible
Raising your deductible can lower your auto premiums, and help you qualify for better rates. Paying a $1000 deductible reduces the monthly premiums, while a $500 deductible requires slightly higher premiums.
Consider your coverage limits
Each state has its minimum coverage requirements for liability insurance. However, you can choose to get more coverage above the state minimum requirement at a cost and qualify for a better insurance quote.
Know the factors that affect your premiums
There are various factors that come into play when determining the premiums you pay. Factors such as driving habits, location, car model, age, and gender impact the auto insurance rate you get.
Knowing the factors that lenders use to determine your rate can help you negotiate the best rate for your car.
Claim auto insurance discounts
Car insurance companies offer car discounts to military personnel, drivers with a clean driving record, students with good academic records, etc.
If you fall in the category of customers who qualify for auto insurance discounts, you can get a discount to lower your monthly premiums.
Optional Car Insurance Coverage
Apart from the mandatory auto insurance policies, there are other optional car insurance policies that car owners can use to protect their assets at additional cost. Some of the optional car insurance coverage options include:
Uninsured/Underinsured Motorist Coverage
This form of auto insurance coverage covers accidents involving drivers with insufficient coverage, or those with no auto insurance coverage.
The uninsured/underinsured motorist policy covers your medical bills and/or repairs to your vehicle.
This coverage pays the cost of repair or replacement of parts if your car is damaged due to collision with other cars or objects such as trees, potholes, or guardrails when you are at fault. It pays the cost of repairing your vehicle or replacing damaged parts.
This coverage protects against theft, fire, vandalism, hail, or other hazards other than collision.
If the car is damaged by a covered peril, the insurer pays the cost of repairing or replacing damaged parts up to the vehicle’s actual value.
Medical Payments Coverage
This coverage protects you, your family members, or other passengers who are injured in an accident. This coverage pays costs associated with the injuries such as hospital visits, surgery, and X-rays.
Personal Injury Protection
Personal Injury Protection works the same way as Medical Payments Coverage but may include other expenses not covered in Med Pay.
It pays the cost of medical expenses after an accident, funeral expenses if someone dies in the accident, and lost income for you or other passengers who are unable to work after the accident.
How to Review Your Existing Car Insurance Policy?
Checking your car insurance policy can help you know what parts of your coverage have changed and any adjustments that need to be made. Here are things to consider when reviewing your car insurance policy:
Review liability limits
When insuring your car, the insurer may require you to set a liability limit, which is equal to or above the state minimum liability coverage.
If you have not reviewed your liability limits, consider increasing the limit to maximize your coverage.
The deductible is the amount you agree to pay out-of-pocket for repairs when an accident occurs.
The amount you pay as deductible reduces the monthly premiums you pay. If you have not reviewed your deductible since taking the policy, you should adjust the amount contributed depending on your situation.
Check your policy for auto insurance discounts. The insurer may include a list of all available discounts in your car insurance renewal packet. If you are unsure of what each discount represents, you should talk to your insurance agent for an explanation.
Medical coverage may change frequently due to changes in the employer's medical benefits requirements, moving between jobs, or becoming unemployed.
Knowing how the policy is set up to cover medical payments and the amount of medical coverage the policy carries can help you know the changes you need to make or when you need a new medical coverage.
Review all drivers
Auto insurance allows policyholders to add drivers who are allowed to drive the insured vehicle.
If you have new drivers in your family, you should review your policy to add them to the policy as drivers. You can also update the list of excluded drivers in your policy.
Should I Have a $500 or $1000 Auto Insurance Deductible?
The choice between a $500 and $1000 deductible depends on your financial situation and how much you can afford. Putting a lower deductible towards your car insurance means that you will pay less in out-of-pocket costs when an accident occurs, but the insurance premiums will be higher.
In contrast, a higher deductible means that you will pay more in out-pocket costs when a claim occurs, but the upfront insurance premiums will be lower.
For example, if your auto policy has a $6000 coverage, and you pay a deductible of $500, it means the insurer will pay $5500 when an accident occurs. A $1000 deductible means that the insurer will pay $5000 when you make a claim.
A 2016 study by Insurance Quotes shows that increasing the deductibles from $500 to $1000 reduces auto premiums by an average of 8.5% in the United States. A bigger increase from $500 to $2000 can result in even higher savings.
The study shows that residents in each state get different savings on premiums, with Michigan getting the least savings at 4%, while Massachusetts residents get the highest savings of 17%.
Therefore, depending on the state where you live, you will need to figure out the savings you get with $1000, and if these savings are worth an extra $500 in deductibles.
How to Reduce Auto Insurance Cost?
Auto insurance is not a fixed cost, and there are things you can do to help you reduce the auto insurance premiums. Here are sure ways to get a lower auto insurance quote:
Car insurance rates for the same type of coverage may vary across insurance companies. Compare rates from different providers to see if you can save a few hundred dollars on your monthly premiums.
Be a good driver
Drivers with a clean driving record are less likely to cause accidents or file claims, and therefore, get favorable insurance rates. Avoid getting speeding tickets or other unsafe road behaviors that may dent your reputation among insurers.
Ask for low mileage discounts
If you drive for lower than average miles every year, you can get a mileage discount to help you reduce your premiums. Also, some insurers provide per-mile coverage, and you can save on premiums if you have short commutes or a work-at-home arrangement.
Improve your credit score
Adding a few points to your credit score can help reduce your monthly premiums by a small margin. Start by paying off your credit card balances and making on-time bill payments to improve your credit score, and get favorable insurance quotes.
Which Cars Are The Most Expensive to Insure?
Luxury cars and high-performance cars with a big engine are the most expensive cars to insure. It costs $3000 to $5000 annually to insure these cars.
Some of the cars with the highest auto rates include:
Mercedes AMG GT has an average annual insurance cost of $4,082, one of the highest rates on the market. AMG GT is a luxury car featuring a turbocharged V-8 engine with 469 hp. It has a price tag of $160,000.
Audi R8 $
Audi R8 has an average annual insurance cost of $4,033. It features a 5.2L dual injection V10 602 hp engine, and such high performance attracts an equally high price tag of $170,000.
Nissan GTR is another high-performance car that has an annual insurance price of $3994. It has a 3.8L V6 engine with a 600 horsepower. It is one of the low-cost entries in the list of supercars, and it has a price tag of $113,000.
Why There is No “Cheapest Car Insurance Company”
When calculating the auto insurance rates to charge car owners, insurers use different methodologies to determine a fair rate depending on various parameters. Some of the parameters that car insurance companies use to justify their numbers include credit score, vehicle model, type of coverage, driving record, driver demographics, etc.
Therefore, it is impossible to get the cheapest auto insurance rates without going through the insurance approval process to determine if you meet the insurer's requirements.
However, different auto insurers charge different rates for the same type of coverage, and it is possible to get a cheaper rate for your car. Compare insurance quotes to know where you get the highest benefits and savings without compromising on the amount of coverage you get for each insured peril.
You can also reduce the amount you pay for auto insurance by offering to pay a higher deductible. If you have shorter commutes to and from work, find pay-per-mile coverage to get a cheaper rate depending on the number of miles you commute annually.
Required Car Insurance Coverage in All States
Car insurance is required in 49 of the 50 US states, and car owners are required by law to have valid auto insurance coverage to use the state's roadways.
Drivers in New Hampshire are only required to show proof of financial responsibility, since the state makes it optional to buy auto insurance.
The mandatory car insurance coverage in most states include:
Bodily Injury Liability
This coverage pays medical bills for people injured in an accident where you or other people listed as drivers on your policy are deemed to be at fault.
It pays lost wages to a person who is injured in the accident and is unable to work. It also pays funeral expenses if there are fatalities due to the accident.
Property Damage Liability
This coverage pays the cost required to repair or replace another driver’s vehicle or property, where you are at fault.
However, this coverage does not cover damages to your vehicle, and you will need to buy a collision or comprehensive cover to cover damages to yourself.
Required Car Insurance Coverage in Some States
Some insurance coverage options are typically optional in most states, but may be required in a select number of states. Some of these policies include:
Uninsured/Underinsured Motorist Coverage
This coverage pays medical expenses and/or damages due to an accident involving drivers with insufficient coverage to pay the bill, or drivers without an active coverage. This coverage is mandatory in 22 states and DC, and optional in the rest of the states.
Medical Payments Coverage
The medical payment coverage, also known as Med Pay, covers medical expenses and funeral expenses if you, family members, or other passengers in your vehicle are injured in an accident.
This coverage is only required in Pennsylvania, Maine, and New Hampshire.
Personal Injury Protection
Drivers in no-fault states are required to purchase personal injury protection when buying auto insurance. No-fault states are states where every driver involved in an accident is required to file a claim with their insurers, regardless of who is at fault.
This coverage is required in 12 states including Hawaii, Florida, Minnesota, and New Jersey.
Is Auto Insurance Cheaper for Single People?
Single people pay higher auto insurance rates than married people because they are considered to be more likely to have accidents.
According to Zebra, Single people pay $160 higher annual in auto insurance premiums than married people. Another study conducted in 2015 by the Consumer Federation of America to survey how insurers price their auto insurance policies found that single people pay higher insurance rates than married drivers.
Married people are more responsible, and they are likely to share driving responsibilities, hence reduce chances of getting accidents or filing claims. They exercise good financial habits, and are more likely to be homeowners compared to single people. Bundling homeowner insurance and auto insurance allows them to get cheaper rates from one insurer and save more on insurance.
The comparison between married and single people also includes divorced and widowed drivers as single people. Divorced and widowed drivers are considered to be at a higher risk of accidents, and therefore, may pay higher rates for auto insurance.
Car Insurance Mistakes You Should Avoid
When buying car insurance, it is common for car owners to make financial mistakes, which can affect their financial situation. Here are common car insurance mistakes that you should avoid:
Not shopping around
Car owners make the mistake of buying auto insurance without comparing what other insurers are offering. If you are in the market for a new auto policy, start shopping around in advance to find insurers with the best rates.
You can use comparison websites to compare auto insurance rates or work with an insurance broker to find the best deals on the market.
Buying insufficient coverage
Most states have minimum requirements for auto insurance, and this should not restrain you from getting more coverage.
Getting personal injury protection, Med Pay, and Uninsured/Underinsured motorist coverage can help you pay off your medical or repair costs when your emergency fund is running low.
Buying too much coverage
Car owners make the mistake of buying more coverage than they need.
If you are driving an old or low-value car, it does not make economic sense to continue paying collision and comprehensive coverage. Only get the coverage that you need the most, and leave out the unnecessary add-ons.
Not reviewing their policy
When your auto insurance is up for renewal, don't rush into signing the papers without looking at the adjustments made to the policy.
Check if the adjustments suit your needs and if you are still getting the benefits you signed up for such as medical payments and car repair coverage.
Lying on the application
Giving false information when applying for auto insurance or making claims can cause irreparable damage to your reputation.
If the insurer finds out that you provided false information, it can terminate your coverage.
Questions to Ask Your Car Insurance Company
When shopping for a car insurance policy, you should be ready to ask questions about the policy to uncover the finer details of the documents.
Here are some questions to ask your car insurance company:
What is covered in my policy?
For most auto insurance policies, liability insurance covers injuries and damage caused to other drivers, passengers, or cars. Ask your insurer to specify everything covered by the policy, and any add-ons that are required in your state.
Who is covered in my policy?
Each policy has different coverage options, and you should understand the parties covered under the policy before you buy. Ask your insurer a list of all potential parties covered by the policy, and the amount of coverage provided for each party.
Does my credit affect my auto insurance rates?
Some states allow insurers to use credit scores in insurance rates calculation, while other states like California prohibit insurers from using credit scores to lockout customers.
If you live in a state where credit scores are allowed in insurance policies, you should find out if the insurer uses credit scores to calculate insurance rates and how your score influences your rate.
How much deductible do I need?
Some insurers have specific requirements on the amount of deductible you can pay, and it ranges from $100 to $1000.
A higher deductible would mean slightly lower premiums for you, while a lower deductible would require higher monthly premiums towards your coverage.
Do I qualify for discounts?
When buying auto insurance, you may qualify for auto insurance discounts if you purchase other forms of insurance, have a clean driving record, you’ve taken a defensive driving course, or you have good academic grades (for teenage drivers).
However, these discounts are not applied automatically, you will have to ask your insurer if you qualify for the discounts.
Coronavirus Car Insurance Refunds
You may have heard about car insurance refunds due to the Coronavirus pandemic. Yes, that is correct. With people forced to stay at home due to social distancing requirements, some insurance companies issued partial premium refunds to drivers who stopped driving or drove fewer miles than usual.
Some of the top car insurance companies offering insurance refunds include:
This insurance company offered $50 per policy refunds to auto insurance customers with an active policy on March 31. Customers got the refunds without any required action on their side.
Geico offered 15% discounts on up to 6 months insurance premium renewal or purchase for the period between April 8 and October 7. New car insurance customers also got the credits.
Auto insurance customers received 15% refunds of premiums paid in April, May, and June.
Farmer's auto insurance customers received a 25% premiums refund for April and a 15% refund for May, except for New York drivers who got a 40% refund on full auto premiums as of May 7.
Progressive offered a 20% credit for April and May auto insurance premiums, while New York Drivers received a similar refund rate in May and June.
State farm car insurance customers received an average of 25% credit on premiums paid from March 30 to May 31. It also cut auto rates by 11% in all states.
When to File a Car Insurance Claim Can be a Good Idea?
When you have been involved in an accident, there are cases when it makes sense to file a car insurance claim. Here are scenarios when you should file a car insurance claim:
You caused a car accident with injuries
If you, family members, or other passengers are injured in an accident where there is a chance you are at fault, you should file a claim.
Accident injuries may lead to big medical bills that may be impossible to pay out-of-pocket, and failing to make a claim exposes you to litigations.
You caused a car accident with serious damages
If you caused an accident that wrecked another person's car, you should file a claim with your insurance company. The insurer will assess the accident to determine if you are actually at fault and organize repairs with the other party's insurer.
If the accident caused significant damage to your car, talk to your insurance to claim collision coverage if you purchased the coverage.
Fault is unclear in the collision
If you are involved in an accident that results in injuries or property damage and the fault is unclear, you should file a claim so that your insurance company can take over the case.
The insurer will reach out to the other party’s insurers to assign responsibility for the accident and reach an agreement on the payouts.
Which Cars Are The Least Expensive to Insure?
If you are looking to save on car insurance rates, it helps to know the cars with the most favorable insurance rates. Here are the least expensive cars to insure:
Mazda CX-3 $1324
Based on Insure’s latest ranking, the Mazda CX-3 is the cheapest car to insure, and it costs just $1,324 in annual auto insurance costs.
With a 148 horsepower engine, Mazda CX-3 is popular with families and it is loaded with multiple safety features such as an automatic emergency braking system and adaptive front lighting that keep the rates down.
Honda CR-V $1333
The CR-V model ranks second among the least expensive cars to insure, with an annual auto premium of $1,333.
Honda worked on making this model safer with the Honda Sensing Package. Some of the safety features included in this model include an automatic emergency braking and forward collision warning.
Subaru Outback $1335
The Subaru Outback ranks among the cheapest cars to insure, and it costs an average of $1335 in annual premiums.
It is loaded with safety features such as the EyeSight Driver Assist Technology, and the Advanced Adaptive Cruise Control.
Is It Cheaper to Insure a Newer Car?
The cost of car insurance depends on various parameters including the vehicle model, insurance coverage, and your driving record, and these factors may determine the rate you get for your new car.
For example, cars that have a higher risk of being stolen attract higher premiums due to the high risk attached to their ownership. This may also apply to high-performance and luxury cars, whose repair or parts replacement cost higher due to the unavailability of spare parts, or whose parts have to be imported from overseas. Cars with easily replaceable parts and that have a low risk of being stolen may be cheaper to insure.
If you buy a new car on loan or lease, the lender may require additional insurance coverage such as collision coverage and comprehensive coverage. The additional coverage protects the lender from the risk of loss in the event of an accident, and the additional coverage may increase the cost of insuring a new car.
Who Has the Cheapest Online Car Insurance?
If you are looking to get the highest savings on car insurance, you should compare rates from several insurers to find best rates. Here are insurance companies with the cheapest online car insurance rates:
Geico has the cheapest auto insurance rates on average, and its minimum coverage costs $409 for a 6-month auto insurance coverage. Geico has one of the best auto insurance quote tools, and you can get an instant online quote for your car.
- State Farm
State Farm has the largest network in the US, and you can get a State Farm agent in your city. It has a minimum auto insurance coverage of $356 for 6 months. State Farm has the cheapest rates for at-fault accidents, with the average rates increasing from $869 to $1,038 after an accident.
USAA has some of the cheapest auto insurance rates, but it is limited to active military personnel, veterans, and their families. It has a minimum auto insurance coverage of $215 for a 6-month policy.
How to Check an Insurer's Complaint Record?
Before buying car insurance coverage, you should check the insurer’s complaints record. The National Association of Insurance Commissioners (NAIC) is responsible for collecting and sharing complaints against the different types of insurance companies.
This association collects complaints about insurance companies from state regulators and publishes this information on its website.
To check an insurer's complaints on NAIC's website, go to the NAIC's Consumer Information Source page and search the insurance company by name or NAIC Company code, the state where you live, and the type of insurance. The search will show a list of the insurance company’s closed complaints. Click on report options to check the complaints about each subsidiary.
The subsidiary you are looking for should have the same address as the one indicated on your policy document. Click on the correct subsidiary’s name and filter the closed complaints by the complaints code, complaint index, state, licensing, or financial data.
For example, use the “complaint code” filter to see a list of all close complaints and the reason for each complaint.