Car insurance is a necessary expense for most Americans, since driving without it is illegal and public transportation options are limited outside of major U.S. cities. Insuring a vehicle can be costly, especially if you’re a new driver or insuring a luxury car, but it can save you tens of thousands of dollars in case of damage or theft.
The ideal car insurance company combines good coverage with reasonable rates and excellent customer service. Although cost matters when shopping for car insurance, it shouldn’t be the only factor. You’ll want to choose a company with a high customer satisfaction rating. That way, the process is smooth and hassle-free when you need to file a claim. At the same time, a good car insurance company will offer plenty of discounts to incentivize good customers.
So what’s the best car insurance company? That depends on a variety of factors. Below, CNBC Select breaks down the top auto insurance companies into six main categories. (See our methodology for more information on how we chose the best car insurance companies.)
Best car insurance companies
Best for affordability
Geico Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Geico coverage and services are available in all 50 states and the District of Columbia and there are 16 different types of discounts available. In addition to the standard coverage options, Geico offers various optional add-ons, such as emergency roadside assistance, rental car reimbursement and mechanical breakdown insurance.
Pros
- Lowest average rates
- Inclusive coverage options, including high-risk drivers
- Available nationwide
Cons
- High premiums for high-risk drivers
- Fewer branches for in-person services
Geico is the best car insurance company for affordable coverage, offering the lowest average premiums for both minimum and comprehensive coverage. It offers 16 discounts, giving reduced premiums for things like good driving, taking a defensive driving course and insuring multiple vehicles. Geico also has a wide range of other insurance products, including homeowners insurance and renters insurance, that make it easy to bundle and save on coverage.
Average annual premium for full coverage: $1,353
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Best for customer satisfaction
State Farm Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
State farm is one of the largest auto insurers based on market share and has an excellent reputation for customer satisfaction. It offers 13 discounts, including ones for safe driving and young drivers.
Pros
- High customer satisfaction
- Largest car insurance company in the U.S.
- Accident forgiveness for good drivers
Cons
- High NAIC complaint index score
- Doesn’t offer gap insurance
State Farm is the largest auto insurance company in the U.S. based on market share, according to the National Association of Insurance Commissioners (NAIC). It enjoys the highest average J.D. Power score of the large insurers, making it best-in-class for customer satisfaction.
Average annual premium for full coverage: $1,480
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Best for wide coverage
Nationwide Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Nationwide offers near-nationwide availability and personalized services, such as On Your Side® Review, a free annual insurance evaluation to ensure you are adequately protected and are taking advantage of any discounts available to you.
Pros
- Available in 47 states and the District of Columbia
- Lowest average premiums for full coverage
Cons
- High average premium for minimum coverage
Nationwide offers one of the widest car insurance networks, with coverage available in 46 states plus the District of Columbia (all states except Alaska, Hawaii, Louisiana and Massachusetts). This is an important distinction because multiple companies competing for your business equals lower premiums. It also stands out for its usage-based insurance program, SmartMiles.
Average annual premium for full coverage: $1,422
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Best for minimum coverage
Auto-Owners Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Auto-Owners offers affordable premiums with high customer satisfaction ratings. There are 12 different types of discounts available, as well as various other types of insurance besides auto.
Pros
- Offers at-fault accident forgiveness as an add-on
- High customer satisfaction scores from JD Power
- Low NAIC complaint index score
Cons
- Only available in 26 states
- Quotes must be obtained through an agent
Auto-Owners is an affordable option for those looking for minimum coverage, with the average annual premium for minimum coverage just $325. CNBC Select also selected Auto-Owners insurance as one of the top picks for young adult drivers and seniors. However, coverage is only available in 26 states.
Average annual premium for full coverage: $1,361
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Best for discounts
Amica Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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Policy highlights
Amica offers a variety of auto insurance policies to fit your coverage needs. The company also offers a total of 18 discounts, including discounts for bundling and for students.
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App available
Pros
- Highly rated by J.D. Power for auto claims satisfaction
Cons
- Not available in all 50 states
Amica is a top choice for its wide availability of discounts, with a total of 18 ways to save. There are several discounts for young drivers, including a driver training discount and a good student discount. Other discounts focus more on the car you drive, including a discount for anti-theft systems, electronic stability control, and features like forward-collision warning. Additionally, you can save by bundling your home and auto insurance, insuring multiple vehicles, and paying your premium in full.
Average annual premium for full coverage: $1,467
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Best for high-risk drivers
Progressive Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Progressive offers a number of lines of insurance to allow for bundling, and convenient tools to help you keep your coverage in your budget.
Pros
- Quotes available online
- Available in all 50 states
Cons
- Above average NAIC complaint index score
Progressive is a top insurer for high-risk drivers, particularly for those with a DUI or DWI on their record. While high-risk drivers often pay higher insurance premiums than the average driver, Progressive generally offers lower rates for these types of drivers than other insurers. Its average full-coverage premium after a DUI or DWI is $2,049.
Average annual premium for full coverage: $1,642
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Best for military members and veterans
USAA Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
USAA’s auto insurance is available in all 50 states, Washington D.C. and some international locations. In addition to low rates and coverage options for unique circumstances, such as for active-duty members, customers have access to an intuitive mobile app.
Pros
- Lowest average premium for minimum coverage
- Highest customer satisfaction ranking
- Superior discounts for military members
Cons
- Only available to military members, veterans and their immediate family members
USAA stands out for enjoying high rankings on multiple factors. For starters, it offers the lowest average premiums. Equally important is customer satisfaction as no one wants to deal with a difficult customer service experience when filing a claim. Luckily, USAA enjoys the highest J.D. Power customer satisfaction scores, so you know you’re “in good hands.” Its consistently affordable rates and high customer service ratings also make it a top choice for cheap homeowners insurance to bundle and save.
The only catch? It’s not available to everyone — only military members, veterans and their immediate family members are eligible for a USAA car insurance policy.
Average annual premium for full coverage: $1,361
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More on our top car insurance companies
Geico
NAIC complaint index (1 is average)
1.35, above average
J.D. Power rating
857 out of 1,000
A.M. Best rating
A++
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State Farm
NAIC complaint index (1 is average)
1.85, above average
J.D. Power rating
877 out of 1,000
A.M. Best rating
A++
[ Return to summary ]
Nationwide
NAIC complaint index (1 is average)
1.47, above average
J.D. Power rating
861 out of 1,000
A.M. Best rating
A+
[ Return to summary ]
Auto-Owners
NAIC complaint index (1 is average)
0.78, below average
J.D. Power rating
862 out of 1,000
A.M. Best rating
A++
[ Return to summary ]
Amica
In addition to a variety of discounts, Amica offers competitive prices on its auto insurance policies. It also consistently ranks highly in J.D. Power rankings for customer satisfaction and claims satisfaction. Coverage is available in all states except for Hawaii.
NAIC complaint index (1 is average)
0.98, about average
J.D. Power rating
909 out of 1,000
A.M. Best rating
A+
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Progressive
NAIC complaint index (1 is average)
1.98, above average
J.D. Power rating
853 out of 1,000
A.M. Best rating
A+
Learn more: Progressive: A top auto insurance provider for high-risk drivers
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USAA
NAIC complaint index (1 is average)
2.01, above average
J.D. Power rating
875 out of 1,000
A.M. Best rating
A++
[ Return to summary ]
How car insurance works
Car insurance covers damage, theft and bodily injury in case of an accident. You pay a monthly (or bi-annual) premium based on the coverage and policy type needed. In case of an accident, you can file a claim and your insurance company will pay out damages based on various criteria. Filing claims can sometimes lead to higher premiums, so you’ll want to do so cautiously. Car insurance companies offer lower premiums to drivers with clean records, as they’re less likely to file damage claims.
The different types of car insurance coverage
Car insurance has five main types of car insurance coverage you can incorporate into your policy. Each one offers varying degrees of protection in case of a loss. At a minimum, you will need liability coverage, which protects against damage and bodily injury. Depending on the level of protection you’re looking for, you might want to add additional coverage to your policy. Here’s a look at some of those options:
- Liability coverage: Basic coverage that is mandatory in most states. There are two types of liability coverage, protecting a policyholder against personal injuries (bodily injury liability) and property damage (property damage liability).
- Collision coverage: Covers repairs stemming from a collision with an object rather than another vehicle.
- Comprehensive coverage: Protects your vehicle in case of damage caused by non-vehicular collision. Covered events include theft, weather-related damage and vandalism.
- Personal injury protection: Pays your medical expenses and lost income from an accident.
- Uninsured motorist coverage: Covers your vehicle against hit-and-run accidents.
Average cost of car insurance
Car insurance rates may vary considerably from one state to the next due to varying regulations and requirements. For instance, car insurance rates are typically higher in no-fault states such as Michigan and New York than other parts of the country. Below are the average car insurance costs by state.
| State | Average annual cost for full coverage | Average annual cost for minimum coverage |
|---|---|---|
| Alabama | $1,843 | $441 |
| Alaska | $1,946 | $421 |
| Arizona | $1,810 | $587 |
| Arkansas | $1,907 | $443 |
| California | $2,291 | $636 |
| Colorado | $2,121 | $500 |
| Connecticut | $1,533 | $620 |
| Delaware | $2,103 | $801 |
| Florida | $3,183 | $1,128 |
| Georgia | $2,085 | $639 |
| Hawaii | $1,275 | $344 |
| Idaho | $1,133 | $267 |
| Illinois | $1,806 | $552 |
| Indiana | $1,295 | $327 |
| Iowa | $1,315 | $223 |
| Kansas | $1,878 | $416 |
| Kentucky | $2,124 | $678 |
| Louisiana | $2,909 | $815 |
| Maine | $941 | $225 |
| Maryland | $1,971 | $815 |
| Massachusetts | $1,262 | $429 |
| Michigan | $2,691 | $1,104 |
| Minnesota | $1,760 | $585 |
| Mississippi | $1,771 | $446 |
| Missouri | $1,943 | $490 |
| Montana | $1,889 | $310 |
| Nebraska | $1,624 | $359 |
| Nevada | $2,779 | $973 |
| New Hampshire | $1,262 | $319 |
| New Jersey | $1,754 | $782 |
| New Mexico | $1,591 | $346 |
| New York | $3,139 | $1,371 |
| North Carolina | $1,446 | $432 |
| North Dakota | $1,302 | $269 |
| Ohio | $1,266 | $338 |
| Oklahoma | $1,998 | $406 |
| Oregon | $1,415 | $616 |
| Pennsylvania | $2,040 | $428 |
| Rhode Island | $1,886 | $551 |
| South Carolina | $1,532 | $524 |
| South Dakota | $1,553 | $276 |
| Tennessee | $1,429 | $371 |
| Texas | $2,019 | $565 |
| Utah | $1,510 | $539 |
| Vermont | $1,061 | $238 |
| Virginia | $1,439 | $494 |
| Washington | $1,410 | $515 |
| Washington D.C. | $2,072 | $607 |
| West Virginia | $1,580 | $421 |
| Wisconsin | $1,292 | $358 |
| Wyoming | $1,582 | $263 |
Source: Bankrate.com
What factors affect your car insurance?
There are several factors that influence the price you’ll pay to cover your car, including ones you can control and some you can’t. Here are a few of the factors considered:
- Your coverage amount. The amount of coverage you choose (full coverage versus minimum coverage), the types of coverage in your policy, and the limits on those policies will change the premium. Your deductible, or the amount you’ll be responsible for covering if you need to file a claim, can also influence your premium — typically, the higher the deductible, the lower the premium.
- Your personal infomation. You’ll likely be asked a lot of questions about yourself when shopping for car insurance, including questions about your age, whether you own a home, are married and in some states, even your gender identity. Your ZIP code and the amount you drive per year can also affect the price you pay.
- Your credit score. Your credit score plays a big part in the price you pay in some states (it’s not allowed to be considered as a factor in California, Hawaii, Massachusetts and Michigan). The higher your credit score, typically, the less you’ll pay for insurance.
- Your driving history. Have several accidents on your record, or a violation like a DUI/DWI? Those factors can make your car insurance more expensive.
- Your car and its features. A six-figure sports car will cost much more to insure than an affordable SUV. While replacement costs can factor into this difference, discounts for safety features can also play a part.
How to choose the right car insurance for you
The best way to find your perfect car insurance company is to shop around.
Each car insurance company considers the factors that affect your premium differently, and the company that gave your friend or neighbor a great rate may consider your information differently. Consider starting with companies you have a relationship with, including your homeowners insurance company, renters insurance company. You may be able to bundle your coverage and save.
To find the right match, you’ll want to get several quotes with the amount of car insurance that’s a good fit for you. Choose a policy that meets or exceeds your state’s minimum auto insurance requirements. And, since car insurance can be a financial protection, it’s a good idea to get a policy that equals or exceeds your net worth, or the total value of assets you own minus any debt.
Once you’ve determined that amount, you’ll want to get several quotes from several insurers, keeping the limits, coverage options and deductible the same. With comparable quotes, you can then look for the lowest premium.
Shopping around for your car insurance every year can be a good way to make sure you’re always getting the best price.
FAQs
How can I find the best price on car insurance?
You can find the best price for car insurance by requesting a quote directly from each insurance company’s website. Some aggregators will pull car insurance quotes from multiple companies when you submit a single form.
By shopping around for car insurance, you can find a plan that works best for your budget and coverage needs. You can save money by bundling other products into your policy, such as homeowners insurance and renters insurance.
Can you get a refund on your car insurance?
Car insurance is generally paid on either a monthly or bi-annual basis. If you’ve already paid your premium for the policy period and want to cancel it, you’ll generally get a partial refund for the unused portion.
Do car insurance companies check your credit?
How do car insurance companies pay out claims?
In case of an accident, you can file a claim with your insurance company by calling the claims department. Major insurance companies have mobile apps that allow you to file a claim quickly and upload all the necessary documents in one place.
Car insurance companies pay out claims after investigating and reviewing all related documents. Be sure to consult your policy for any limitations regarding your coverage.
Who is considered a high-risk driver?
There are several reasons why a car insurance company could consider you a high-risk driver. You may be considered high-risk if you have a previous at-fault accident, a history of traffic violations, a DUI or have a large number of points on your license. In some cases, you may be required to file an SR-22 form.
You may also be considered a high-risk driver because of certain characteristics, such as if you’re a young or inexperienced driver or have poor credit.
What is the actual cash value of my car?
If your vehicle needs to be replaced, you’ll likely receive a payout equaling its actual cash value (ACV), minus your deductible, or the amount you’re responsible for paying before your insurance covers the rest. The ACV is a determined replacement value for your car (generally equal to the amount you’d have to pay to buy the same or similar model), minus depreciation. To get paid the price of a brand-new vehicle you’ll need replacement coverage.
What is the cheapest car insurance company?
The three cheapest car insurance companies based on average annual premiums are USAA, Auto-Owners and Geico. However, car insurance rates can vary significantly depending on factors like your driving record, your credit profile and where you live. Rates can also vary by age, and the best car insurance for seniors might not be the best car insurance for a young driver, for example. Shop around as the cheapest insurance company for you may differ.
Bottom line
Car insurance is an inevitable, costly expense for most Americans, and many companies compete for your business. Understanding how premiums are priced and requesting multiple quotes can save money while ensuring your vehicle is protected against damage and loss. Factor in customer satisfaction ratings and you’ll increase your odds of being a happy customer if you ever have to file a claim.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.
Our methodology
To determine the best car insurance companies, CNBC Select analyzed dozens of U.S. insurance companies that come with policies to suit an array of needs.
When narrowing down and ranking the best car insurance companies, we focused on average cost, coverage, availability, ease of use and customer satisfaction using data from the National Association of Insurance Commissioners, AM Best, J.D. Power rankings and car insurance premium data from Bankrate.com.
The average annual premium data is based on a 40-year-old driver with a clean driving record and good credit. The driver insures a 2020 Toyota Camry, commutes five days a week and drives 12,000 miles annually, with the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
After reviewing the above features, we sorted our recommendations by best for affordability, best for customer satisfaction, best for discounts, best for high-risk drivers and best for military members and veterans.
Note that the premiums and policy structures advertised for car insurance companies are subject to fluctuate in accordance with the company’s policies.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Sumber: www.cnbc.com
