We have conducted a thorough analysis of the leading car insurance companies in the country, taking into consideration their commitment to providing reliable customer service and a wide range of coverage options at affordable rates. Our comprehensive review aims to assist you in identifying the ideal insurer to fulfill your specific car insurance requirements.
Key points
- The overall best car insurance company of 2023 is American Family.
- USAA, Nationwide and Auto-Owners also have 5 stars ratings.
- USAA is the cheapest car insurance company for good drivers, with an average rate of $1,412 per year.
The best auto insurance companies at a glance
- Best car insurance: American Family
- Best for the military community: USAA
- Best for collision and comprehensive coverage: Nationwide
- Best for drivers with an accident on their record: Auto-Owners
- Best for drivers looking for low-cost coverage: Geico
- Great for customers buying a new vehicle: Travelers
- Best for family discounts: Westfield
American Family
- Average rate for good drivers
- $2,176
What you should know
American Family offers a wide range of basic and specialized auto insurance coverage to meet your needs, and its long list of discounts can help you save. American Family’s rates are average among the companies we evaluated, but competitive product offerings and high customer satisfaction set American Family apart from the rest.
What is the best car insurance company?
Our analysis has determined that American Family (AmFam) stands out as an excellent car insurance company. While it may not have the lowest average annual rate of $2,176 for good drivers, AmFam provides numerous discounts to help policyholders obtain more affordable premiums. Additionally, AmFam offers various optional coverages and add-ons, such as accident forgiveness, new car replacement, and a diminishing deductible.
With the AmFam diminishing deductible feature, customers receive a $100 credit at the beginning of their policy (or $50 for 6-month terms). Each year without filing a claim, the deductible decreases by $100, with a maximum credit of $500. This means that a $500 deductible can potentially be reduced to $0 if the policyholder remains claim-free for five consecutive years.
In terms of customer experience, AmFam distinguishes itself by having the lowest number of consumer complaints compared to the insurers we analyzed. This information is based on the complaint index provided by the National Association of Insurance Commissioners (NAIC).
Taking all these factors into account, AmFam emerges as a highly recommended car insurance company. While it may not be the cheapest option upfront, its extensive range of discounts, optional coverages, and diminishing deductible feature make it an attractive choice for drivers seeking comprehensive coverage and potential long-term savings.
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Best car insurance company for liability-only coverage
Auto-Owners, USAA and Westfield have the best car insurance for liability-only coverage. Each offers liability coverage below the national average and received the highest ratings in our analysis.
Auto-Owners has the cheapest liability-online coverage, with an average rate of $404 a year, though USAA only trails slightly behind with an average rate of $466 a year.
Liability insurance is required in most states and pays for the other party’s injuries and property damage if you’re at fault for an accident. A liability-only car insurance policy does not include any additional coverage, like personal injury protection (PIP) or collision and comprehensive coverage.
Best car insurance company for senior drivers
When it comes to car insurance for drivers aged 60 and older, Auto-Owners, Nationwide, and USAA are all highly recommended. In our rating for the best car insurance for seniors, each of these insurers received a 5-star rating.
Among them, USAA stands out for offering the most affordable rates to senior drivers, with an average yearly rate of $1,554. It's worth noting, however, that USAA coverage is exclusively available to eligible members of the military community. If you don't qualify for USAA, Auto-Owners is a great alternative. It boasts the second-lowest rates among the insurers we analyzed, with an average yearly rate of $1,768.
For USAA policyholders who need to add a teen driver to their car insurance policy, the average cost for the teen's coverage is only $1,293 per year. However, it's important to remember that USAA primarily serves the military community, so not all drivers are eligible for coverage.
If you're ineligible for USAA, another option to consider is American Family. The average cost of adding a teen driver (ages 16 to 19) to your car insurance policy with AmFam is $1,556 per year.
Adding a teen driver to your policy often leads to increased rates since teens have less driving experience and therefore pose a higher risk. However, there are ways to reduce the cost of coverage. Many companies offer discounts to teen drivers who maintain good grades or who leave their vehicle at home while living on campus during college. Additionally, you may be able to secure a discount for vehicles equipped with safety features like backup cameras or lane assist sensors. If you're purchasing a car for your teen, it's advisable to choose one with crash avoidance features such as lane departure and blind spot sensors, as these have been found to benefit teen drivers according to a study conducted by The Insurance Institute for Highway Safety. Remember to inform your insurer if your teen's car is equipped with these safety features.
Best car insurance company for bundling with home insurance
When it comes to bundling your auto and home policies, American Family, State Farm, and USAA are all excellent options.
Among these insurers, State Farm offers the largest discount for bundling home and auto policies, with potential savings of up to 18% on your premiums. Nationwide and Auto-Owners also received favorable ratings in our assessment of the best home and auto bundles.
Bundling discounts are among the most significant savings you can obtain from your insurer. By purchasing multiple types of insurance from the same company, such as auto and home insurance (or auto and renters/condo insurance), you can enjoy substantial savings on each policy.
The exact discount amount may vary depending on your insurer, but typically falls within the range of 10% to 20% off the annual premium. Mark Friedlander, spokesperson for the Insurance Information Institute, highlighted the potential savings and benefits of bundling, emphasizing the financial advantages of combining policies with a single insurer.
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Best car insurance company by customer complaints
According to the NAIC complaint index data, American Family has the lowest level of consumer complaints. Each state is required to log complaints when they are filed. The industry average complaint index is 1.0, and any score below that is considered below average. American Family achieved a score of 0.16, which is classified as "very low."
Average annual car insurance rates by state
Car insurance rates vary by state and even ZIP code. Here’s the average cost of car insurance for a good driver in every state.
Average annual cost car insurance by state
Did you know fatal accidents go up in the summer? States with the most summer driving fatalities.
How much does car insurance cost?
The average annual car insurance rate for good drivers is $2,067, or about $172 per month according to our analysis.
How much you pay for coverage depends on several factors, including:
- Type of coverage purchased.
- Coverage limits selected.
- Selected deductible, when applicable.
- Your age.
Your gender (except in California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania).
- Your location.
- Your claims history.
- Your car insurance history.
- Your credit-based insurance score (except in California, Hawaii, Massachusetts and Michigan).
- Make, model and age of the vehicle.
- Special equipment or features of the car.
- Average annual rate based on driver profile
What is car insurance?
Car insurance is a contractual arrangement between an individual and an insurance company, offering financial protection in the event of an accident or other specified incidents. By paying a premium or regular policy payments, the insurer assumes responsibility for compensating for financial losses resulting from a covered accident or incident.
Car insurance provides coverage for various accident-related expenses, depending on the type of coverage selected. These expenses may include:
Injuries to you and your passengers.
Car insurance offers coverage for a range of potential expenses associated with accidents. These expenses may include:
- Compensation for injuries sustained by another driver, their passengers, or pedestrians involved in an accident.
- Coverage for the cost of repairing or replacing another driver's vehicle if you are at fault for the accident.
- Financial protection for repairing or replacing your own vehicle in the event of damage, total loss, or theft.
- Assistance with legal expenses if you face a lawsuit following an accident.
What types of car insurance do I need?
Most states require motorists to purchase liability car insurance, but depending on where you live and whether you finance your vehicles, you may be required to purchase other types of coverage. Here are the most common types of car insurance to consider.
Liability insurance
Liability car insurance provides coverage for expenses that arise due to your fault in an accident, including costs for other drivers and their passengers. It also covers your legal defense and any settlements or judgments if you face a lawsuit. This type of insurance is divided into two parts:
- Bodily injury (BI) liability: This covers the medical expenses and related costs incurred by the other driver, their passengers, or a pedestrian who gets injured in an accident caused by you. It can also assist with your legal expenses if you are sued after the accident.
- Property damage (PD) liability: This covers the expenses involved in repairing or replacing someone else's property, such as their vehicle, that gets damaged in an accident caused by you.
- Liability insurance is mandatory in every state except for New Hampshire and Virginia, although even drivers in those states may find it necessary to have coverage in specific situations.
Uninsured motorist/underinsured motorist insurance
Uninsured motorist (UM) insurance provides protection for you and your passengers if you sustain injuries in an accident caused by an uninsured driver or if you are involved in a hit-and-run incident. In certain states, UM insurance may also cover the expenses to repair or replace your vehicle if it was damaged by an uninsured driver.
On the other hand, underinsured motorist (UIM) insurance offers similar coverage in situations where you are in an accident with a driver who has insufficient insurance to cover the costs associated with the accident.
While UM coverage is mandatory in some states, insurance experts highly recommend adding it to your policy even if it is not required in your particular state. This additional coverage can provide essential financial protection in case you encounter an uninsured or underinsured driver.
Collision coverage
Collision coverage pays to repair or replace your vehicle if it was damaged after “colliding” with an object, such as a vehicle, fence or tree. It can also provide coverage if you are involved in a hit-and-run or a roll-over accident.
There are no states that require collision coverage, but your lender or lessor may require it if you finance your car. It is typically bundled with comprehensive car insurance.
Comprehensive coverage
Comprehensive car insurance coverage reimburses you for losses from theft, as well as damage caused by an event other than a crash. This includes damage from hail, flooding, fire, vandalism, theft, collision with an animal or falling objects, such as rocks or tree limbs. Generally, it covers damage caused by an incident that you could not have prepared for or prevented.
Like collision coverage, comprehensive car insurance isn’t required at the state level but is often necessary if you finance your vehicle.
Personal injury protection
Personal injury protection (PIP) will cover accident-related medical bills for you, your passengers and family members in your household, regardless of who is at fault for the accident. It can also cover lost wages and the cost of everyday services, like childcare, if an accident leaves you or your passengers unable to complete the task.
PIP is usually required in “no-fault” or “choice no-fault” states and unavailable in others.
Medical payments coverage
Medical payments coverage, commonly called MedPay, covers accident-related medical bills for you and your passengers, regardless of who is at fault. This can include the cost of doctor visits, ambulance services, X-rays, surgery and funeral fees.
MedPay, which is required in some states, is similar to PIP, but coverage is limited to medical expenses. It will not cover lost wages or replacement services.
How to save on car insurance
Here are some things you can do to get cheaper car insurance:
Take advantage of car insurance discounts. Ask your insurer about car insurance discounts, like good driver discounts and bundling home and auto insurance.
Participate in usage-based programs. These programs track how you drive, so you may score lower rates if you drive safely or infrequently, depending on the program.
Drive safely. Drivers with a good record and no traffic violations tend to see lower rates.
Go claims free. Your insurer may offer cheaper car insurance rates if you go claims-free for a certain number of years.
Keep your credit score up. Insurers factor in your credit score when determining how much you’ll pay. The better your credit score the cheaper your car insurance may be.
Choose a higher deductible. If you raise your deductible you’ll see lower rates, but your claims payout will be smaller.
Shop around. It’s important to compare car insurance quotes regularly to make sure you’re getting the best deal for your coverage needs.
Find the best car insurance for your needs
To find the best car insurance company for you, figure out what types of car insurance coverage you need before getting several car insurance quotes to compare.
Determine the type and amount of car insurance coverage you want
Any car insurance policy you buy should meet your state car insurance requirements, at a minimum. If you finance your vehicle, you must also factor in lender requirements, which often include collision and comprehensive coverage.
After you meet any state or lender requirements, determine what, if any, additional types of coverage you’d like included in your policy. For instance, if you finance a new car, you may want to consider gap insurance until you pay off your auto loan.
Purchasing coverage you don’t need can lead to unnecessarily high premiums, while not carrying enough coverage can leave you financially vulnerable if you or your car are involved in a collision.
Get and compare car insurance quotes
Getting several quotes will give you a sense of which companies best meet your needs and preferences, which may be even more important than finding the lowest price.
“We recommend obtaining at least three quotes from a mix of national and regional insurers. This way, you can compare cost and coverage apple to apples. You can obtain quotes online, through independent and exclusive insurance agents or directly from insurers,” said Friedlander.
It’s also a good idea to find out if you’re eligible for any discounts, such as a home and auto bundling discount or a good student discount.
Methodology
Our insurance experts evaluated top car insurance companies in the nation to determine which offer the best car insurance based on average rates, coverage features, collision claims process and consumer complaints.
Each car insurance company was eligible for up to 100 points, based on its performance in the following key categories:
Cost: 50 points. We analyzed rates from Quadrant Information Services based on seven driver profiles for a policy with 100/300/100 in liability coverage, uninsured motorist coverage and comprehensive and collision coverage. We awarded up to 50 points based on insurers’ average rates for:
Drivers in various age groups.
Drivers with bad credit.
Good drivers.
Drivers with infractions, such as speeding tickets, an accident or a DUI on their record.
Consumer complaints: 30 points. We collected complaint data from the National Association of Insurance Commissioners, which shows the volume of car insurance consumer complaints against each company. When a consumer lodges a complaint to their state’s department of insurance — often about an insurance company’s claims process, delays, denials or settlements — these complaints are logged and tracked.
Car insurance coverage features: 15 points. Car insurance policy features can help make coverage more affordable both before and after an accident or covered incident. We evaluated car insurance policies offered by each insurer and awarded points to insurers that offered these valuable benefits:
- Accident forgiveness (5 points).
- New car replacement (5 points).
- Vanishing deductible (5 points).
SR-22 availability: 5 points. After a major traffic violation, some drivers must provide proof that they have the type and amount of coverage required by their state. Proof of coverage is obtained through an SR-22 filing, but not all insurers offer SR-22. Insurance companies that offer SR-22s were awarded points.
Why some companies didn’t make the cut
Insurance companies with rates significantly higher than the national average, or with a substantial number of customer complaints, did not make our list of the best car insurance companies.
Car insurance companies with a lack of policy options, such as new car replacement or accident forgiveness, may also have been excluded, depending on how well they scored in other categories.
Why you can trust us
Our insurance experts follow strict editorial guidelines to ensure fairness and unbiased reviews.
To help you find the best car insurance for you, our insurance experts evaluated each company’s car insurance rates and coverage options, the volume of customer complaints against the company and its collision repair grade from auto body professionals.
Frequently asked questions (FAQs)
Who has the cheapest car insurance?
Our analysis shows that USAA offers the cheapest car insurance rates for most driver types and age groups. However, USAA is only available for military members and their families. If you don’t qualify for USAA, Geico and Auto-Owners also have low average rates for most driver groups.
Do I need car insurance?
In most states, it is against the law to drive without car insurance. Your state’s Department of Motor Vehicles or Registry of Motor Vehicles can help you determine how much insurance you’ll need to legally operate your vehicle in your state. You can also get this information from an insurer licensed in your state.
If you finance or lease your vehicle, your lender will likely require you to carry a specific amount and type of coverage, often full-coverage, which includes liability insurance, as well as collision and comprehensive coverage.