Auto insurance is a contract between a driver and an insurance company. In the event of an accident, vandalism, or theft, the insurance company will cover the driver’s financial loss — with limitations. In exchange for this coverage, the driver pays a monthly or annual fee called a premium. As of 2019, 48 states require drivers to maintain current auto insurance in order to legally drive a car, and enforce steep penalties for uninsured drivers.
There are two states, New Hampshire and Virginia, that don’t require auto insurance, but drivers are still financially responsible in the event of an accident. No matter where you live, auto insurance is the only way to protect yourself from paying tens of thousands of dollars for repairs, as well as medical and legal costs.
There are dozens of national and local auto insurance providers in the United States, but here is our selection of the best auto insurance companies of 2019.
What Does Auto Insurance Cover?
Like other kinds of insurance, auto insurance covers specific perils with limitations — it’s not a blank check for anything that happens to your car. While every policy is different depending on your provider and coverage options, in general, auto insurance covers:
- property damage – for anything your car might hit
- medical costs – for injuries
- liability costs – for legal fees
Auto insurance also covers any additional family members you add to your policy, and anyone who drives your car (with your permission). However, personal auto insurance won’t cover your car when you’re driving it for business purposes, like delivery or ride-sharing services. For that, you’ll need supplemental coverage or an entirely separate policy, depending on what your provider offers.
In addition to basic liability and property damage coverage, you can also purchase add-on auto insurance options like:
- collision coverage – for damage to your car as a result of a collision
- comprehensive coverage – for damage to your car caused by other things, like theft, vandalism, and some natural disasters
- personal injury protection (PIP) – for medical costs to the driver and/or passengers in your vehicle, and
- uninsured/underinsured motorist coverage – in case another driver involved in your accident doesn’t have enough insurance.
How Does Auto Insurance Work?
There are hundreds of auto insurance companies in the United States, from national providers like Amica, Allstate, and State Farm to regional ones like the New Jersey Manufacturers Insurance Group. Each company offers customizable policies depending on what coverage you need or want. An auto insurance policy usually lasts for six months or one year, and most providers allow you to choose the length you prefer. You’ll also likely have the option to pay for the entire term up-front, or on a monthly basis. For more details, see our 2019 Car Insurance Buyer’s Guide.
How Much Does Auto Insurance Cost?
The price of your auto insurance premium depends on where you live, your age, driving history, the make and model of your car, and a variety of other factors. According to the Insurance Information Institute, the state with the highest average premium is New Jersey Manufacturers Insurance Group (over $1,300 per year), while Idaho enjoys the lowest average premium (just under $600 per year). As a buyer, the most important thing to remember is that the cost of your premium won’t be the same at every company, so it’s always a good idea to compare quotes from several different insurance providers.
What’s the Best Auto Insurance Company?
There is no single “best” auto insurance provider for every driver, but we investigated 59 companies in our search for the best auto insurance companies of 2019.
We also looked at the best options in all 50 states, including regional providers. Every state offers a unique set of insurance providers, and there are plenty of circumstances that affect the policies and coverage available to you. We’ve reviewed the best auto insurance options in every state using a methodology similar to the one for our review of nationwide providers.