Best Auto Insurance: Choosing The Right Policy

Finding the best auto insurance policy for you means considering your top priorities—whether it's low cost, superior customer service, or some other factor—and shopping around for the best policy to suit your needs.

According to Forbes, Nationwide is the best car insurance company overall, followed closely by USAA, Travelers, and Erie. Nationwide impressed with its combination of excellent rates and many helpful add-on coverage offerings. Its car insurance rates are competitive across the board for various driving records and ages.

NerdWallet's analysis ranks Travelers as the best car insurance company for 2024, followed by Auto-Owners and American Family.

The best car insurance companies for you will depend on your driving record, state, and other individual factors.

Discounts

Discount Types by Category

Auto insurance discounts fall into a few categories, with many possible discounts within those categories. These categories include:

• Driving habits
• Car features

Common Discounts

Some common auto insurance discounts include:

• Multi-policy or bundling: Insuring multiple items with the same company, such as your car and home, or multiple cars with the same company.
• Safe driver/good driver: Rewarding drivers for being responsible and incident-free for a certain period.
• Student: For students enrolled in high school or college with good grades.
• Electronic/paperless billing: For opting to receive policy documents electronically.
• Senior/mature driver: For drivers over a certain age.
• Professional/occupational/group membership/education: For certain professions or members of specific organizations.
• Defensive driving: For taking an approved defensive driving course.
• Anti-theft devices: For cars with security features like alarms or tracking systems.
• Early signing/renewal: For signing or renewing before the policy expiration.
• Hybrid or electric vehicle ownership: For owning an environmentally-friendly car.
• Good credit: For having a history of paying bills on time.
• Low mileage: For driving fewer miles per year than the national average.

Discount Amounts

The amount of money saved through discounts can vary. Some common auto insurance discounts may offer savings of 2% to 25% or more. For example, bundling home and auto insurance can often result in discounts of 5% to 25%. Good driver discounts can range from 10% to 40%.

It's important to note that advertised discounts may not apply to your entire insurance bill. Additionally, there may be a limit on the overall discount you can receive on a policy, such as a maximum discount of 25% or 30%. Discounts can also vary by state, so it's essential to check with your insurance provider to see what's available in your area.

Customer satisfaction

USAA, for example, has received high scores for customer satisfaction in J.D. Power's studies and has a strong financial strength rating from AM Best. However, USAA is only available to military personnel and their families.

State Farm, the largest auto insurer in the US, has also been recognised for its above-average customer satisfaction rating and high claims satisfaction score. They offer a wide range of discounts and extras, including travel expense coverage and rental car coverage.

Erie Insurance, available in 12 states, has received high scores in J.D. Power's studies and has a low NAIC complaint index. They offer unique add-on features such as their Rate Lock feature, which prevents rates from rising unless changes are made to the policy.

Amica, available in all states except Hawaii, has also been recognised for its high rankings from J.D. Power for customer satisfaction. They offer a wide range of insurance products and have a dividend policy that returns up to 20% in premiums.

Other companies that have been recognised for their customer satisfaction include The Hartford, Wawanesa, Auto-Owners, and Nationwide.

When choosing an auto insurance policy, it is important to consider your specific needs and circumstances. Shopping around, comparing quotes, and reading reviews can help you find the best policy for your needs.

Financial strength

When it comes to choosing the best auto insurance policy, it's important to consider the financial strength of the insurance company. This is because the financial strength of an insurance company indicates its ability to pay out claims. Here are some key factors to consider when evaluating the financial strength of an insurance company:

• Ratings from Independent Agencies: Five independent agencies, including A.M. Best, Fitch, Kroll Bond Rating Agency (KBRA), Moody’s and Standard & Poor’s, rate the financial strength of insurance companies. It's a good idea to check the ratings from multiple agencies, as they use different rating scales and standards. While a company may highlight a higher rating from one agency, it's important to consider the ratings from a range of agencies to get a more comprehensive view.
• Frequency of Rating Changes: It's worth noting that agencies can change their ratings at any time, so it's prudent to check the ratings of insurance companies annually to stay informed about their financial strength.
• Understanding the Ratings: Each agency has its own rating code, so it's essential to understand the specific ratings and what they mean. For example, an A+ rating from A.M. Best is the second-highest rating, while an A+ rating from Fitch, Kroll, or S&P is their 5th-highest rating.

When evaluating the financial strength of an insurance company, it's important to consider the ratings from multiple independent agencies and stay up-to-date with any changes in ratings. This will help you make a more informed decision when choosing an auto insurance policy.

Coverage options

• Liability coverage: This helps pay for injuries and property damage caused by the policyholder in an at-fault accident. It is typically required by law in most states.
• Collision coverage: This covers repairs to your vehicle if you're involved in a collision with another vehicle, object, or pedestrian.
• Comprehensive coverage: This protects your vehicle from non-collision-related damage, such as theft, vandalism, or weather damage.
• Uninsured/underinsured motorist coverage: This covers your injuries and property damage if you're hit by a driver who doesn't have insurance or doesn't have enough insurance.
• Personal injury protection (PIP): This pays for your medical expenses and lost income after an accident, regardless of who is at fault.
• Medical payments coverage: Similar to PIP, this covers only your medical expenses after an accident.

In addition to these standard coverage options, many auto insurance companies offer additional endorsements or add-on coverages. These can include:

• Gap insurance: This covers the difference between the actual cash value of your vehicle and the amount you still owe on a loan or lease if your car is totaled or stolen.
• Rental car reimbursement: This covers the cost of a rental car while your vehicle is being repaired after a covered claim.
• Roadside assistance: This provides services like towing, jump-starts, and lockout assistance if your vehicle breaks down.
• Accident forgiveness: This prevents your rates from increasing after your first at-fault accident.
• New car replacement: This covers the cost of replacing your vehicle with a new model if it's totaled or stolen within the first few years of ownership.

When choosing an auto insurance policy, it's important to consider not only the price but also the coverage options that are most important to you. Be sure to review the specific coverage details offered by each company before making a decision.

Claims satisfaction

State Farm

State Farm received a score of 891 on J.D. Power's 2023 U.S. Auto Claims Satisfaction Study. The insurer beat competitors, including Geico, Nationwide, and Liberty Mutual. One reason for State Farm's high ranking is its Easy Claims Center, which enables customers to file and track an accident claim entirely online. State Farm also has one of the largest local agent networks, providing in-person support if needed.

NJM Insurance

NJM Insurance is only available in a few states but received an excellent rating from J.D. Power, coming in third with 900 out of 1,000 on the 2023 U.S. Auto Claims Satisfaction Study. NJM also receives rave reviews on Trustpilot, with an exceptional 4.7 stars. One unique feature of NJM is that it offers a discount for full coverage.

Amica

Amica earned the highest rating on the J.D. Power 2023 U.S. Auto Claims Satisfaction Study, with 909 points out of 1,000. Amica has a reputation as one of the best car insurance companies for customer service, and recent customer reviews show that customers appreciate how easy it is to talk to real humans instead of bots. Amica also has a 4.5-star rating on Trustpilot.

Erie Insurance

Erie Insurance came in a close second behind Amica in the 2023 U.S. Auto Claims Satisfaction Study, with a customer satisfaction rating of 902 out of 1,000. Past reviewers have described the claims process as "extremely fast," and Erie also provides up to $500 per pet for veterinary care, making it an ideal choice for pet owners.

Country Financial

Country Financial is a smaller, regional insurer that is not available in all states. However, it received a high ranking from J.D. Power, coming in fourth with a score of 894 out of 1,000 in the 2023 Auto Claims Satisfaction Study.

Frequently asked questions