Choosing car insurance can be an intimidating prospect. There are more than 300 providers in the US, each of which offers slightly different policies with unique terms and conditions. While most fit into specific brackets - or types of car insurance - there are always idiosyncrasies. No two insurers are ever the same.
What your insurance policy protects you against varies from one insurer to the next. Liability coverage is mandatory in the vast majority of states and covers third-party losses, including bodily injury. For instance, if you injure somebody in an accident, your insurer will pay for any claims against you, up to a specific limit.
Comprehensive or Collision Coverage?
If you want to protect your own assets, you’ll need some form of comprehensive or collision insurance. Collision coverage covers the repair costs when you hit a vehicle, tree, or other hazards on the road while your vehicle is in motion. Comprehensive coverage pays for damage while your vehicle is stationary (such as somebody vandalizing your car).
Not two insurance providers are the same
You might think that competition would make all insurance companies the same, but that’s not how it works out in practice. The complexity of the industry’s products means that there are almost always opportunities to save by picking the best provider. No two companies will look at your personal characteristics and come to the same conclusion about the risk that you pose. Each has a slightly different perspective on your chances of making a claim. And that can affect your monthly premiums.
What about the deductible?
You should also be aware that almost every insurer charges a deductible - a sum of money you must pay upfront to access your cover if you get involved in an accident. Usually, deductibles start at around $200 and go up to $1000 - but they can be more. In general, the higher the deductible, the lower your monthly premium. If you are willing to pay insurers a lot of cash upfront to access policy benefits, you’re much less likely to take risks on the road - or so the reasoning goes.
What to look for choosing an insurance company?
In this article, we take a look at the best insurance companies for 2020. As we run through them, it is worth bearing several things in mind. One is to check your insurer’s claims handling history. Some insurers may offer outstanding premiums, but they’re not worth paying if they don’t payout. Good providers will advertise that they “payout on 99 percent of claims” or have “97 percent claims satisfaction” - or something to that effect. The higher the claims satisfaction number, the better because it indicates that you’re much more likely to receive the money owed to you.
Another thing to think about is whether the policies you’re looking at are the same. You’ll often come across two different plans that seem like the same insurance policy, but they could be entirely different when you read the small print. It doesn’t automatically make sense to go with the cheapest car insurance option in a situation like that.
A third consideration is the types of payment options that the insurance company offers. Some will allow you to purchase insurance for the year upfront, saving on interest. Others get you to pay in monthly installments - it often depends on your preferences.
Just remember, car insurance companies are businesses like any other. They’re always looking to make a profit. They will protect you if you abide by their terms, but they provide minimal leeway. If you break your agreement's conditions - even accidentally - they may refuse to pay up.
How We Rate Car Insurance Companies
The companies on this list are here because of their excellent performance across a range of criteria, including:
- Coverage options
- Price competitiveness
- Payout percentages
- Niche insurance options
- Customer-first features
- National availability
- Claims satisfaction
You should note that not all providers on this list will score well on every metric. Many insurance companies offer excellent coverage options for one group but fewer for others. For that reason, you should always consider which option is optimal for your specific circumstances. There is no such thing as the “best insurance company for all people, in all places, at all times.”
So what are the best car insurance companies for 2020? Let’s take a look.
Liberty Mutual is the sixth-largest insurance provider in the country and one of the “big eight” consumer organizations, like J.D. Power, reviews regularly. The auto company's site makes it easy for people who are new to car insurance to customize policies to suit their needs. It takes you through policy choices, step-by-step, getting you to consider what you need instead of what they would like to sell, giving you confidence that the company has your best intentions at heart.
Liberty Mutual offers customers all kinds of perks that make its policies more compelling. For instance, if you own your home, the insurance company will give you discounts in certain states. You can also get money off if you drive an electric or hybrid vehicle or insure multiple cars through them.
Liberty Mutual offers accident forgiveness for those looking to stay with the auto insurance company long-term. If you hit somebody’s bumper after five years accident-free, they won’t hike your premiums. It’s a kind of insurance for your insurance, allowing you to keep your no claims bonus and avoid higher fees even if you make a claim.
Nationwide offers collision, comprehensive liability, and medical payments as insurance options. Like Liberty Mutual and other providers on this list, they also provide accident forgiveness to prevent a hike in your rates if you collide with another vehicle. Furthermore, the company gives you a host of ways to save even more money off your premium. For instance, if you become an “affinity member” of a qualifying organization - such as professional groups, special interest groups, or sports groups - you can get a discount. The insurance company also offers money off for good students with B grades or higher and drivers who fit defensive anti-theft devices to the vehicles.
Nationwide scored highly in J.D. Power’s Insurance Shopping Study of car insurance companies, coming in second for consumer satisfaction. Part of this has to do with the insurance company’s plug-and-play telematics systems. You simply fit the tag and download the app. The system will then regularly send your driving data to Nationwide, giving them an accurate picture of your driving habits, reducing your auto insurance quote.
MetLife was once one of the largest car insurance companies in the country. In recent years, its auto insurance wing has played second fiddle to its other financial services, such as retirement solutions. But that doesn’t mean it has stopped offering compelling products for motorists - it hasn’t.
MetLife has been in business for more than 150 years. It’s the brand people choose when they want a provider with proven longevity.
The real perk of choosing MetLife is that you can often bundle your auto insurance with other services you buy through the insurance carrier. For instance, you may ask your employer to combine your MetLife auto insurance with existing health insurance, providing savings for both.
MetLife also allows you to sign up for auto insurance via your employer’s group discount and remain on the policy, even if you leave or retire. In other words, once you start receiving benefits, MetLife will lock them in.
State Farm is the country's biggest insurer, collecting more than $40.9 billion in premiums in 2019. It is also widely considered one of the best in the US, thanks to its sheer range of products.
The insurance company’s success comes down to two factors: some very slick advertising and multiple methods for getting discounts on your premiums. Customers can enroll in the company’s Drive Safe & Save scheme and download an app that feeds driving information to the company, potentially saving them money. There's also the Steer Clear scheme for eligible under 25s who haven't had any at-fault claims in the last three years, which offers 15 percent off. In addition to this, you can get an accident-free discount, money off your premiums for attending a defensive driving course, and a good student discount if you have a decent GPA.
State Farm tries to benefit loyal customers, too, by offering discounts for multiple vehicles and multiple forms of insurance. For instance, you can get up to 17 percent off auto insurance if they also have a condo, homeowners, or renters insurance through the company.
American Family is a mid-size American auto insurer with a track record for providing excellent customer satisfaction. According to consumer reports, it came in third place in J.D. Power’s survey of more than a dozen firms in its class and was the most loved insurer in the whole of the southwest.
The brand’s main selling point is the level of control it gives you over what you pay. You can pick your coverages and discounts like items off a menu, making it relatively easy to save. Options include emergency roadside assistance, rental car reimbursements, and accident forgiveness.
American Family also runs periodic discounts on its basic premiums, such as 10 percent premium credit, if you make successful payments for a specified period.
Safeco is slightly different from the other car insurance companies we’ve seen on this list. The brand is the Seattle arm of Liberty Mutual and focuses on providing a personalized customer experience. It partners with independent insurance agents, making it relatively easy to find the best coverage for your needs. You tell the brand your zip code, and it’ll give you a list of contact details you can use.
Safeco says that two things make it different from other companies on the market: it’s diminishing deductible and reimbursements for first-aid.
On the first point, Safeco will reduce your deductible by $100 for every year you hold a policy with them up to a maximum of five years. So, if you take out a policy with a $1000 deductible, you’ll only have to pay $500 if you claim after five years, with no change to your premiums.
On the second point, all Safeco auto policies come with up to $10,000 of reimbursements for first-aid administered to you and others at the scene of an accident - something that many insurers do not include as standard.
The United States Automobile Association collects around $15.2 billion in insurance premium revenue every year, making it the fifth-largest auto insurer in the country. Its popularity comes from its highly-focused market strategy targeting military personnel, service veterans, and their families. On average, members of the organization save around $707 per year on their premiums - which is considerable when you consider that the average person pays around $1,500 per year for car insurance.
Overall, customers are incredibly pleased with USAA’s service, giving it a 5-star rating according to J.D. Power. The main blemish on the company’s record is the recent B+ rating from Better Business Bureau (BBB), related to electronic payments system issues.
United Auto Insurance
United Auto Insurance coverage is available in Illinois and Indiana, but it is worth mentioning here because of its exemplary customer service. The company has achieved a 5-star rating from existing customers (which it posts on its website) and also has an A+ rating from Better Business Bureau - the highest score possible.
The reasons for this are many. One is the fact that it offers same-day SR-22 insurance, meaning that you obtain the insurance you need rapidly, even if the authorities consider you a “high risk” driver. There are options for commercial enterprises and motorcyclists too. For instance, you can get guest passenger insurance for all makes and models of motorcycles, including performance varieties.
Finally, United Auto Insurance works hard to provide its customers with the latest insurance tips to help them save money. Information is available on the company's website.
Allstate makes it as easy as possible to bundle various insurance types together into a single manageable package. Besides auto, it offers home, off-road, renters, motorcycle, uninsured motorist coverage, and term life insurance and discounts, depending on the number of products you purchase.
The brand’s most interesting product for motorists is Milewise, a pay-per-mile insurance policy. The way it works is simple. You provide mileage information to Allstate, and then it’ll calculate a premium based on what you tell it. The fewer miles you do, the less you pay.
The company also has a related service called Drivewise. Here you allow Allstate to track your driving habits in exchange for possible discounts if you drive safely.
Allstate’s menu of insurance coverage options is impressive compared to other car insurance companies. You get the usual collision and comprehensive coverage options. But you also get specific products designed to protect you in individual situations. For instance, the company offers “sound system insurance,” which covers the cost of replacing stolen or damaged audio and video equipment. You can also bolt-on personal injury protection, which covers you for things like medical bills or lost wages if you acquire a disability following an accident and.
If you’re worried about being hit by an uninsured or underinsured driver, State Farm can help you out there too. It offers underinsured motorist coverage that promises to cover all your expenses if the other driver is at fault and doesn’t have an insurance policy of their own.
Travelers Insurance is just inside the top ten auto insurance providers in the US, generating around $4.9 billion in premiums in 2019. The firm prides itself on being socially responsible and your fiduciary friend. It won’t try to upsell you. And it promises only to offer insurance products that you actually need.
Currently, Travelers Insurance operates in 42 states. The types of policies you can get vary from region to region because of differences in state laws. For instance, in Colorado and Illinois, the insurer offers ride-sharing insurance, a new product for individuals who drive for transportation network companies or use mobile ride-sharing apps to collect customers.
Travelers Insurance also offers auto cover as part of its “umbrella insurance” - a product designed to protect you from “unexpected events.” For instance, it provides an extra $1 to $10 million in liability insurance, helping to protect your assets in the event of a large claim against you. It also promises to cover attorney costs for both auto-related and general insurance events.
Esurance is California’s number one insurance company and is currently making inroads across virtually every state in the country. A part of Allstate, it’s a special wing of the brand designed to make switching from one insurer to another as easy as possible.
Esurance is at the forefront of the fintech revolution. Like other car insurance companies, it uses state-of-the-art technology to provide helpful mobile and online tools that make selecting insurance policies easy. It has been going since 1999 and was the first to bring auto insurance online. Since then, it has introduced all sorts of innovations, such as video and photo claims and online insurance advice counselors, to help people get impartial advice.
The firm offers customers all sorts of perks. It’s easy to update your policy and make a claim. And you can take advantage of money-saving products, such as pay-per-mile insurance and multi-policy discounts. You can also get a 15 percent discount if you’re an alumnus of any Pac-12 school.
Progressive is one of the nation’s largest insurers, with more than 18 million customers. It offers round-the-clock support 365 days of the year and offers the average driver an impressive $750 annual saving.
Getting bundled car insurance quotes from the company is surprisingly easy. You simply follow the website wizard, tell it what you need, and then enter your ZIP code.
Progressive has been around since 1937. Its philosophy is to “take an innovative approach to auto insurance” - and that’s certainly clear from its online services. It’s also not afraid to stake out its political orientation, focusing heavily on COVID-19 assistance and diversity and inclusion.
Geico has some of the smartest marketing in the industry, which transformed this once small player into a force big companies need to reckon with. According to the most recent data, Geico achieved a 97 percent customer satisfaction rate and has received countless honors for its service quality - two reasons it makes this list.
The list of discounts on offer is also considerable. Geico offers military discounts - reduction in fees for servicemen and women. It also provides senior driver discounts for those with more experience on the road and federal employee discount, which comes from its roots in the state sector.
You can also get other quality-of-life features bundled into your policy. With 24/7 roadside assistance, for instance, Geico provides the labor to change flat tires, towing services (for non-accident-related situations), and jump starts if your engine goes cold. And there’s the company’s Auto Repair Xpress, which connects you to the firm’s network of mechanics for guaranteed repairs as long as you own the vehicle. Consider these when you receive a car insurance quote from the company.
Mapfre Insurance Group
Mapfre Insurance Group, formerly known as The Commerce Group, currently operates in 19 states, though it plans to increase its coverage in the coming years. The Massachusetts-based auto insurance company offers a range of collision, comprehensive and medical payments coverages for virtually every eventuality. It’s most innovative product is its AutoMaster Package Endorsement for ACIC states. This provides coverage for loss of earnings following an accident and bail bonds and replacement cell phones and laptops stolen from vehicles.
Discounts available through Mapfre Insurance include money off for AAA members, discounts for buying your home insurance through the company, good student discounts, multi-car discounts, and green discounts for low CO2 vehicles drivers. The insurer also automatically enrolls you on the Auto Glass repair program, allowing you to get a quick fix if you chip, crack or smash your windshield without affecting your premiums.
When choosing car insurance companies, always shop around. Ask them about the discounts they offer and don’t be afraid to negotiate. Remember, the more you can prove you’re a safe driver, the more money they will take off your premiums. Only buy the insurance you actually need - never more. And don’t accept the first car insurance quote that comes your way.