Car ownership comes with unexpected costs. After you’ve bought the car, you have to factor in the cost of gas, maintenance and everyone’s least favorite: the dreaded insurance.
Car insurance companies often get a bad rap, partially thanks to reviews from disgruntled customers being readily available online. That makes it hard to determine the best auto insurance for you.
And what does “best” car insurance company even mean, anyway?
The answer differs widely from consumer to consumer. If saving money is your biggest concern, you’ll probably value cheaper premiums over all else. If you’ve had bad experiences with customer service, you’ll want a company known for its superior service and reliability.
You may also need to consider other factors, like whether an insurer covers drivers with poor records or offers discounts for teen drivers with good grades.
Best Car Insurance on a Budget
Auto insurance rates depend on various factors, including driver age, geographic location and driver track record. Therefore, the cheapest car insurance varies from driver to driver.
Here’s a list of companies offering budget-friendly car insurance. All prices reflect minimum liability coverage.
Erie Insurance Group
You might not have heard of Erie Insurance Group. That’s because, as of February 2023, it’s only available in 12 states plus the District of Columbia. But compared to other insurers, Erie’s rates tend to be lower.
In addition to offering competitive rates, Erie Insurance Group ranked number two in the 2023 J.D. Power U.S. Auto Claims Satisfaction Study.
If you live in Wisconsin, Illinois, Ohio, Indiana, Kentucky, Tennessee, Pennsylvania, West Virginia, Virginia, North Carolina, Maryland, D.C. or New York, check out Erie to see if you could save money.
Average Rate: $41 per month
State Farm
No matter where you live, you can likely get an auto insurance policy from State Farm. A car insurance policy from State Farm costs about 29% less than the national average, making it a great budget pick.
In addition to low premiums, State Farm has a variety of discounts, ranging from policy bundling to safe driving. This can help you score an even lower car insurance rate, giving you more flexibility in your budget to spend or save.
Average Rate: $50 per month
Geico
You probably know Geico from those commercials with the British gecko. But that gecko’s claim about saving you 15% or more on car insurance could be true.
Geico is the second largest insurer in the U.S. and is available in all 50 states, making it a realistic option for most drivers.
Average Rate: $61 per month
Best Car Insurance Customer Service
Customer satisfaction can be measured in many ways. To determine the most reliable car insurance company, we turned to the aforementioned J.D. Power U.S. Claims Satisfaction Study.
The study rates insurance companies based on seven categories: repair process, overall satisfaction, the initial claims reporting process, getting an estimate, rental experience, claims servicing and settlement. It then awards each insurer a score out of 1,000 to determine which companies have the happiest customers.
Here are the top three, in order:
Amica Mutual
Amica Mutual, available in 49 states (excluding Hawaii), ranked as the top auto insurance company in the 2023 J.D. Power study. Amica has relatively positive customer ratings on sites like Consumer Affairs and responds to negative reviews to try and make the customer’s experience right.
Overall Satisfaction: 909
NJM Insurance Co.
NJM, also known as New Jersey Mutual, is second in the J.D. Power study. The company sells auto insurance in five states: New Jersey, Pennsylvania, Connecticut, Maryland and Ohio.
Overall Satisfaction: 900
Erie Insurance Group
Budget-friendly Erie Insurance came third in the J.D. Power study. Erie Insurance is rated relatively well by its policyholders, and customers have several ways to contact customer care, including online chat, email, phone and in-person.
Overall Satisfaction: 902
Best Car Insurance for Teens
Teen drivers typically find it hard to get affordable insurance. A new driver’s lack of experience and maturity places a black mark on them, leading to higher premiums. But there is hope out there for young drivers looking for decent insurance coverage at an affordable price.
State Farm
State Farm offers a variety of discounts for young drivers. The Good Student Discount offers discounts of up to 25% for drivers under 25 who maintain good grades in school. You can also get a driver training discount for taking driver’s ed classes.
The Steer Clear safe driver discount (also designed for drivers under 25) uses an app to record your trips, and you can also watch safe driving videos and take quizzes. If you complete the program within six months, you’ll be eligible for a discount.
Erie Insurance Group
Erie Insurance offers several discounts designed to help lower the cost of insurance for young drivers:
- The Youthful Driver Discount is for unmarried drivers under 21 who live with their parents.
- The Youthful Longevity Discount is designed for unmarried young drivers who spend multiple years in a row under an Erie policy, whether their own policy or one belonging to their parents.
- Finally, the Driver Training Discount gives cheaper rates — discounts range from 5% to 20% — to drivers under 21 who complete an accredited driver training course.
Check Erie’s other insurance discounts to learn more about these discounts and see other ways to save.
American Family
American Family offers several discounts for youung drivers, including the following:
- The Good Student discount is available for young drivers who consistently receive good grades from school or college.
- The Young Volunteer discount rewards drivers under 25 who volunteer for at least 40 hours per year with a lower premium.
- The Generational discount is designed for young drivers whose parents are existing American Family Insurance customers.
A full list of discounts is available on AmFam’s website.
Best Car Insurance for a Bad Driving Record
If you have a bad driving record, you may find it hard to get affordable car insurance. But don’t despair: Some auto insurance providers offer affordable policies even to bad drivers. You just have to know where to look. We found three car insurance providers that offer reasonable premiums for drivers with tickets, accidents and DUIs on their records.
State Farm
State Farm may have an affordable car insurance policy for you if you have a history of speeding or auto accidents. The following are State Farm’s average monthly premiums for drivers with various dings on their records:
- Ticket: $135
- Accident: $154
- DUI: $367
Erie Insurance Group
Although its coverage area is fairly limited, Erie Insurance Group offers very favorable rates for drivers with a poor driving record — particularly those with a DUI on their record. Average monthly costs are as follows:
- Ticket: $121
- Accident: $133
- DUI: $181
American Family
Like Erie Insurance, AmFam has a relatively limited coverage area but could be a good pick if you are eligible for coverage. The average monthly rates with AmFam are below:
- Ticket: $196
- Accident: $248
- DUI: $260
Top Car Insurance Companies Compared
Insurance Company Average Monthly Premium* Good Student Discount Safe Driving Discount Car Safety Equipment Discount
Erie | $41 | No | Yes | Yes |
Geico | $61 | Up to 15% | Up to 22% | Yes |
USAA | $34 | Yes | Yes | Yes |
Amica Mutual | $92 | Yes | Yes | Yes |
American Family | $61 | Yes | Yes | Yes |
Allstate | $96 | Yes | Yes | Yes |
State Farm | $50 | Up to 25% | Up to 30% | Yes |
Progressive | $66 | Yes | Yes | Not specified |
Nationwide | $80 | Yes | Yes | Yes |
*Average monthly premium rates were determined by ValuePenguin.com, which obtained quotes from the largest car insurance companies based on the example of a 30-year-old male driver.
How to Choose the Best Car Insurance Company For You
Consumer Reports recommends shopping around for the best deal, even if you already have insurance. Doing so will show you various options so you can make the best decision based on your needs and budget.
Your best bet is to get in touch with the company and ask some questions pertaining to your situation. Here are a few important questions to get you started.
What Types of Claims Are Covered?
The minimum mandatory coverage varies depending on where you live. The first place to check is your state insurance commissioner’s website to see those minimum requirements. For example, in Ohio, only liability insurance is required by law.
But you can buy more than the minimum requirement to fully protect yourself and your assets.
Ask your insurance agent what a policy will cover. If you stick with basic liability insurance, read the fine print to see the types of claims it covers. Ditto if you add physical damage coverage or anything above and beyond the minimum.
What Is Excluded?
Just as you need to know what’s covered, you should know what’s excluded. For example, some policies may not cover you if you’re in a collision with an uninsured driver, if you’re a victim of vehicle theft, if you collide with an animal or if your car is damaged in a natural disaster.
Ask for a list of what’s not covered to determine the likelihood that these exclusions will affect you. For example, if you live in an area prone to hurricanes, you’ll want to ensure your car is covered for natural disasters. If you often drive on country roads, you’ll probably want to be covered if you hit a deer.
Can I Choose Who Performs Repairs?
When your car sustains damage, some insurance companies will choose the auto repair shop that will fix your car. This is usually due to an agreement between the repair shop and the insurance company, where the shop cuts the insurance company a deal for sending customers their way.
Usually, this works fine, but if you have a preferred mechanic, you might not appreciate being told where to get your car fixed. Or, if you have a high deductible, you might want to get a second opinion on the price before committing to a repair order.
What Are the Costs?
With any insurance plan, the most notable costs are the monthly premiums. But your deductible could cause serious financial issues in case of an accident.
A high deductible means you’ll need to pay more out of pocket for a repair before your insurance policy kicks in and covers the rest. If you have enough savings, you could get away with a higher deductible and lower monthly premium. But if your safety net is lacking, opting for a lower deductible and higher premiums could be a smarter choice.
What Additional Coverage Is Offered?
Liability insurance typically only covers damage to other people or property when you’re at fault. Under liability insurance, paying to repair your own car could be on you. Therefore, you might consider additional coverage to help cover you in various scenarios.
Comprehensive coverage protects you in cases where your car is damaged by an event other than an accident, like an act of Mother Nature.
Collision coverage pays to repair your car after an accident, typically whether or not the accident was your fault.
Uninsured motorist protection covers you when you’re in an accident with a driver who doesn’t have insurance. Without this protection, you would be liable for any damage to your vehicle, which could cost you big.
Personal injury protection, also called “no-fault” coverage, helps pay for medical and other costs no matter who was at fault for the accident. It can also cover things like lost wages and transportation to medical appointments. Some states mandate this type of coverage, while in others it’s an optional add-on.
How to Save Money on Car Insurance
You have multiple ways to ensure you’re getting the best rate on your car insurance, no matter which company you choose.
Bundle Your Insurance
Going with the same company for all your insurance needs can be beneficial. Most insurance companies offer discounted rates when you bundle things like home, auto and personal property insurance.
Drive Safely
It can pay to be a responsible driver. Most insurance companies lower your rates the longer you go without an accident. Others use technology like apps to measure your driving behavior and offer discounts for using the app to become a better driver.
Pay in Full
You might get a discount by paying your annual car insurance premium in full. It’s worth considering whether you have enough savings and want to spend less overall on car insurance. If you can’t afford to pay in full, ask if you can get a discount for enrolling in an auto-pay program.
Driver Training
Many insurance companies will offer a discount if you complete driver training courses, regardless of your age.
Car Safety Equipment
Things like anti-theft devices, airbags and safety technology found in new cars could get you a discount. Make sure you mention these when getting a quote.
Choosing the right car insurance policy can be a stressful experience, but it pays to shop around and consider all your options before signing on the dotted line.
Loading comments...
Leave a Comment