The Best Auto Insurance

Which insurer has your back when the unforeseen happens?

by Kevin Oliver
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Best Overall Pick


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For national insurers, State Farm was the top pick, but if the lowest price is your top priority, you can always get quotes in your area from a number of car insurance providers.

The right insurance company should protect you from financial ruin in the event of an unforeseen accident. The wrong insurance company will happily collect premiums each month, only to utilize loopholes even Skyler White couldn’t see coming to leave you high and dry. No pressure, right?

Marketing may paint a rosy picture, but I’m here to help you find the insurer that’ll have your back when things aren’t as jovial. I surveyed over 500 adult drivers in the U.S., compiled research data from independent rating agencies, and spoke with two experts to determine what matters when selecting an auto insurer.

Knowing that there will never be a single insurer that that fits the bill for everyone, I set out to determine which company has proven to be the best for the greatest number of people, and at the most reasoning rates. (Given that price is a key component of auto insurance, and it varies so dramatically from state to state, be sure to check out rates in your area.)

Which company offered the best prices without skimping on coverage? Who was most likely to be fair and prompt when settling a claim? At the end of it all, it was State Farm.

This insurer excels in customer service, boasts an excellent financial rating, and holds a laudable ranking from J.D. Power. Plus, it maintains some of the lowest premiums around. It’s wholly owned by its policyholders, which enables it to largely ignore the whims and wishes of Wall Street, and pay closer attention to serving real people like you.

How I chose the best car insurance

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One thing you won’t find when shopping for car insurance is a dearth of options. I spent over 35 hours poring over reviews and rankings to find the company customers were the most satisfied with. I compared quotes and reviews from 20 of the top-rated insurance companies in the nation, and referred to J.D. Power’s independent ratings for intel on which firms were easiest to deal with. To get a pulse on the modern shopper, I conducted an internet-wide survey to determine the needs and expectations ordinary people have when selecting an insurer. I also conversed with two auto-insurance experts with decades of experience between them to get real-world perspective on what’s important to you, the customer.

Choosing an auto insurer is no small decision; you’re effectively choosing a company to pay the mound of bills that can arise after an accident. To that end, I placed a high priority on fairness during the claims process. Truth be told, it wasn’t until a deer wandered out at precisely the wrong time that I gave any serious thought to the full extent of my own coverage.

In surveying over 500 adults aged 18 to 54, I found that most respondents had stuck with a single company for their entire life. Much of that is due to the time and effort required to actually change from one to another, but with online tools becoming ubiquitous, it’s simpler now than ever before.

There’s no exact science to pinpointing a superior car insurer, but I paid close attention to a few items in particular:

  • Financial stability
  • Avaialable discounts
  • User and market research reviews
  • History of claim handling
  • Breadth of availability
  • The opportunity to meet with a flesh-and-blood agent

It should be noted that I encountered many small, regional insurance companies that had excellent coverage and a history of fair treatment. I ultimately decided to focus on national companies that the majority of people have access to, but I’d encourage you to evaluate what lesser-known outfits operate in your neck of the woods, as well.

Occasionally, smaller outfits offer coverage that’s just as stout as the major players, while paying close attention to how they treat their customers. The smaller the company, the higher the stakes as it applies to customer service.

Other auto insurance options to consider

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Best auto insurance for young drivers

Nationwide With up to 15 percent off for being a student with a B average or higher, extensive coverage, and first-time accident forgiveness, Nationwide is a no-brainer for teen drivers.
Read more

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Best cheap auto insurance

Progressive Progressive offers an impressive selection of coverage options at (comparatively) affordable rates, and it’s a recognized powerhouse in the industry. They are considered one of the industry leaders in driver and vehicle discounts, but tend to fall short on overall vehicle coverage.
Read more

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Best full coverage auto insurance

Ameriprise Financial Ameriprise Financial is one of the best full coverage auto insurance companies because coverage includes stacked uninsured motorist coverage and new car replacement coverage.
Read more

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Best classic car insurance

Grundy Worldwide Not for the casual collector, Grundy Worldwide exists to protect vehicles that are viewed by owners as investments. Founded in 1947, it’s known for its expertise and flexible coverage plans. If you’re serious about protecting your classic car, Grundy Worldwide is the undisputed leader in the sector. Just be prepared to pay handsomely.

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Best auto insurance for older drivers

AARP/The Hartford With specialized benefits for drivers over the age of 50, annual rates that can be locked in, and some of the best customer service available, AARP/The Hartford is the clear choice for senior motorists.

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Best auto insurance for military

USAA Boasting a five-star J.D. Power rating, impeccable customer service, and excellent financials, USAA is considered one of the best insurance companies on the market. It only serves the military and their families, but if you’re eligible, look no further.

A full review of the best auto insurance

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Assuming you’ve flipped on your tele in the past year or 10, you’ve probably heard State Farm claim to be “a good neighbor” to its clients. It’s a starkly different approach from its rivals. Most auto insurers tend to focus on raw savings as their selling point, yet State Farm directs attention to the service end of the equation. Aaron Rodgers and a devilishly memorable jingle work wonders for marketing, but what really sets it apart from the competition? Its knack for treating clients like actual humans as opposed to numbers.

Part of State Farm’s equation for success is the transparency it applies to discounts. Its agents are known for proactively going through available discounts with their customers to remove pressure from the customer. Many of their most formidable competitors aren’t as eager to make clear which discounts exist, leaving it to the client to put in the research ahead of calling. It also offers up to 15 percent off if you’re a young driver and you take the Steer Clear course.

Another critical differentiator is its decision to make available face-to-face agents in a world where personal interaction is being deemphasized to cut costs. On the surface, this may seem like an insignificant perk. In the event of an accident, however, dealing with an agent — a real, local individual with a vested interest in making you whole — is an appreciated extra. Fletcher Wilson, an independent agent with over 15 years of experience, agreed on the importance of individual agents.

I see customers being lured into purchasing price-driven, mass-marketed insurance through call centers, when having a relationship with a local agent is a better fit.-Fletcher Wilson, independent insurance agent

Impersonal call centers are adequate for handling simple sales transactions, but when you’re in the unfortunate position of having to file a claim due to an accident, tolerance for such things drops precipitously. I consulted with another expert who has sold insurance locally for over a decade. He preferred to remain unnamed for this article due to client sensitivities. He also emphasized the importance of local, accessible agents, which sets State Farm apart from the other big companies.

Having a real agent can eliminate a lot of the confusing gray area in your policy. Customers tend to remain more satisfied dealing with an agent in person, rather than a voice from a call center.-Anonymous local insurance expert

State Farm’s financial standing is remarkably strong due to being a mutual insurance company. Its policyholders own the company, not shareholders. For those unaware of the difference, it’s important to understand that State Farm is not traded on any stock market. Because of that, it isn’t under the typical barrage of Wall Street pressures — most notably, the pressure to perpetually increase profits. It also holds 18.37 percent of the overall market, making it the largest provider of auto insurance in the United States. So, you should feel certain that State Farm has the cash in its coffers to back its promises.

State Farm claims to act like a good neighbor, treat you with respect, and keep premiums low. While no firm is without flaw, I’ve found that State Farm follows through as a rule, and makes a habit of siding with the customer. There are many companies that offer savings comparable to those you’ll find at State Farm, but no national rivals match its transparency or customer service.

Who is it best for?

State Farm is suitable for people in all walks of life. It’s the perfect fit for a first-time buyer, a young driver (particularly one with good grades), a married couple, people with a clean driving record, and those with good credit. Many of these will depend on factors in your region or state, but if you fit into any of those categories mentioned above, it’s worth reaching out for a quote.

Who should keep shopping?

State Farm’s online and telephonic capabilities aren’t quite as convenient as a company like Esurance. Someone who’s looking to avoid (or is simply unconcerned with) dealing with a personal agent may be able to save a bit more by looking elsewhere. Also, people on the hunt for cut-rate insurance may not be happy with its premiums. As mentioned earlier, State Farm tends to cost more than some of its key rivals, but it makes up for it with above-average customer service.

Of course, there are downsides to being on a giant insurance company’s client list. The one worth mentioning is the likelihood of becoming a “non-essential” customer, or having to wait in line to meet with your agent. Especially in an emergency, this can be incredibly annoying. State Farm does, however, offer a 24-7 hotline concerning claims.

If you’re looking to be a high priority on your agent’s client list, small or local options are a worthwhile alternative to check. Both of the experts I consulted agree that it’s wise to look into local insurers before committing to one of the major players. For example, Fletcher Wilson mentioned Central Mutual Insurance as one of his favorite smaller insurers.

Central Mutual Insurance has excellent customer service in both claims and general responsiveness. Central Insurance has a policy in place that guarantees a live call to all customers that have filed claims within two hours of the initial report of accident.-Fletcher Wilson, independent insurance expert

I ultimately didn’t have this company in the running because it only operates in a few locations -- Ohio, Illinois or Indiana, with more limited options in 15 other states -- but that doesn’t diminish their feasibility for those who happen to be in those locations. In polling a few drivers on staff, I also received a glowing recommendation for Kemper Preferred, yet another smaller firm with more personalized service. In Kemper’s case, it sells insurance in 47 states (along with Washington, D.C.), but because it only serves six million policyholders total via a network of independent agents, caring for those customers is a heightened priority.

The runner-up for best auto insurance

I’ll admit that the front-runner wasn’t always so obvious. Car insurance is a highly competitive field, fraught with asterisks, “gotchas,” and limits of coverage that vary by state. It’s also not the type of product that’s suitable for trial runs, and in some cases, opting for second-best could cause all sorts of frustrations come claim time. That said, there was one additional outfit that was consistently well regarded.

Amica Mutual

The runner-up is Amica Mutual. Amica came tantalizingly close to being my number-one pick for many reasons. They were J.D. Power’s best overall pick in 2014, boasting a five-star rating and near-industry leading customer-service ratings.

Two issues in particular held it back from grabbing gold in my review. For starters, Amica is a direct insurance company, working solely through call-center agents and online reps. Face-to-face consultation is seldom needed, but with Amica, it’s never an option.

Secondly, there’s price. Although Amica has earned the right to charge top-tier prices, a 40 percent (on average) delta between Amica and State Farm was impossible to disregard. These rates are likely to change every region, but they were consistently far apart in a litany of major cities. That said, if you live in an area where Amica happens to be more affordable, it’s a company very worthy of consideration.

Other auto insurance companies worth noting

Nationwide Insurance Read the review
Liberty Mutual Read the review
21st Century Read the review
Progressive Read the review
Farmers Insurance Read the review
Travelers Read the review
Ameriprise Financial Read the review
The Hartford Read the review

Choosing the right type of car insurance for you

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Understanding the coverage

Choosing your policy is never a one-size-fits-all deal. There are many different types of coverage and bundling plans. Most states require some degree of insurance, particularly if you are leasing or paying a loan on the vehicle. Here’s a quick rundown of the main types of auto insurance.

Liability coverage – typically required by law, this covers bodily and property damages of others caused by you in the event of an accident. It can also protect you in court in the event of a lawsuit. If the damages exceed the level of coverage you pay for, you’ll have to pay the rest out of pocket. (Yes, that is indeed a sad trombone off in the distance.)

Collision coverage – this coverage pays for the damages to your car if you hit another vehicle or object, get hit by another car, or roll over. This is typically required if the car is financed or leased.

Comprehensive coverage – comprehensive will cover damage to your car that is not caused by a collision. It generally covers things like fire, hail, flooding, and vandalism. It also covers animal-related damages, broken glass, and theft.

Uninsured & underinsured motorist coverage – this pays for damages and medical costs resulting from an accident caused by someone who either has no insurance, or has insufficient insurance. Typically this will only cover bodily — not property — damages.

Medical payments coverage – medical payments coverage helps pay for covered medical expenses for anyone injured in your vehicle during an accident, regardless of who is at fault. This also covers you as a passenger in someone else’s car, and as a pedestrian if a car runs into you. There are no deductibles or waiting periods with this type of insurance. You can usually add Personal Injury Protection (PIP), which may have a deductible. This helps cover lost wages and rehabilitation costs that result from your accident.

Picking a policy

Picking the policy that best fits you will require some intelligent shopping and awareness of how much you can afford to spend on coverage. If you’re the cautious type, it’s certainly not a bad idea to purchase a policy that covers you in a broader array of situations.

If you’re less concerned or more frugal, make sure you do plenty of research on the best plans for your budget. Saving on premiums is great, but only if you’re properly covered. No matter the depth of coverage you seek, an individual agent is the best person to help you make the smartest decision for you.

I highly recommend having an agent for advice and counsel when making decisions about selecting the correct protections options. Cheaper is not always better.-Fletcher Wilson, independent insurance expert

If you’re shopping for insurance to protect your classic car, I’m mighty envious. Beyond that, though, it’s wise to distinguish between protecting an old car that’s driven daily, and a bona-fide classic that wouldn’t seem out of place at Barrett-Jackson's next auction.

If you’re driving an older car as an everyday vehicle (think: Toyota Corolla circa 1994), classic car insurance wouldn’t serve you properly. For those cases, I would recommend shopping at a conventional insurance company and seeing which ones offer the best plans for an older automobile. The aforementioned Grundy Worldwide is ideal for the car owner looking to protect a financial investment — you know, like something out of Gone In 60 Seconds.

What makes a good auto insurance company?

Customer service – in a world infatuated with getting things done quickly, rather than getting things done correctly, a company that takes the time to actually help their customers really sticks out.

Fair premiums – while it’s unreasonable to expect all-encompassing coverage for a few nickels, pricing does matter. Particularly with insurance, it’s less about price itself and more about value.

Extensive coverage – a good insurance company should offer many types of coverage and bundling options. By granting you more options, you’re less likely to end up paying for something you’ll never use.

Fair claims process – filing a claim is a dreadful event in even the best of circumstances. Toss in an insurer that lacks sympathy or has a knack for dodging payouts, and you could be thrown into financial turmoil.

Financial standing – taking a look at how long your insurer has been in business is a wise move. You’ll want a firm that’s been doing this for some time now, and if you can help it, one that isn’t traded publicly on the stock market. Privately held insurers don’t have to answer to the profit-driven demands of Wall Street.

Availability – the last thing you need when stranded on the side of the road is for a DC-10 to fall from the sky in your general direction. Also, it’d be pretty unfortunate to not be able to reach your insurance agent.

Real agents – this factor is one of the critical points that pushed State Farm to the top of the list. I know firsthand that dealing with a call-center agent after an accident is one of the more trying experiences one can go through. Just having the option to meet with an agent face to face adds a humanistic element that’s becoming increasingly difficult to find.

Discounts – look, we’re all interested in learning one thing: What’s the secret to saving money on your auto insurance? A short list includes:

  • Safe driver (clean record)
  • Military status
  • Good student
  • Good credit
  • Multiple automobiles
  • Bundling home and auto

Final thoughts

Insurance is among the most important things that a person can buy, and choosing a company that won’t deliver on its promises can wreak havoc on your finances. Much like a will, auto insurance is something we all hope to never need. At some point, however, you’ll probably have to submit a claim, and having a reputable firm on the other end is critical.

State Farm is where I recommend insuring yourself and your family, or at least reaching out for a quote in order to compare with the coverage you’re presently paying for. It offers the most extensive coverage and insurance plans for prices that aren’t unreasonable. Put another way, it offers the best value proposition of any nationwide auto insurer.

If you’re looking for the most affordable auto insurance provider in your area, I recommend getting a free quote from multiple providers.

Have any thoughts, personal stories or questions you’d like to share? I’d love to hear what you have to say, so please, comment below!

If you're curious, the nation's second largest insurer declined to be considered for any of the honors in this article, but based on our research, would not have earned a recommendation from us. In the effort of transparency and out of respect for our readers, we felt it just to inform you that we're unable to include the company assets due to a request from its legal team.

Sources

Interviews
Survey
Articles
  • "Car Insurance Buying Guide," Consumer Reports, October 2014
  • "2014 U.S. Auto Claims Satisfaction Study," J.D. Power, 2014
  • "The Best Classic Car Insurance Reviews," CarsDirect, June 2013
  • “How to Find the Best Auto Insurance for Seniors,” Trusted Choice
  • “Progressive,” Credio, November 2014
  • "Which is the Best Insurance Company for You?," NerdWallet, July 2013
  • “The Best Cheap Car Insurance,” Reviews, January 2015
  • "State Farm," Credio, November 2014
  • "State Farm Car Insurance Ratings," Insure, 2014
  • “Best Auto Insurance Companies,” Value Penguin
  • “How to Buy the Best Car Insurance for Young Drivers,” Nationwide
  • “Discount Car Insurance Never Looked Better,” State Farm
  • "State Farm's Edge? It's Private," Crain's, April 2012
  • "What is the Best Military Auto Insurance Company?," AutoInsurance

View All Sources


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