Best and worst auto insurance companies

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Thinking about shopping your auto insurance? A huge percent of people never shop their insurance needs — and that’s a bad idea considering that modern American business punishes loyalty, rather than rewarding it.

Car insurance ads on TV promise accident forgiveness, vanishing deductibles and other selling points. But those features are just a side show to the main act, which is a company’s reputation with satisfying customers after a claim is made.

Read more: Car insurance rates: Geico vs. Progressive vs. Amica vs. State Farm

Best and worst auto insurers

Money expert Clark Howard has long sung the praises of two insurers in particular — USAA and Amica Mutual.

USAA in particular recently was named the top pick for auto insurance in every single region of the country, according to the J.D. Power 2018 U.S. Auto Insurance Study.

But the downside with USAA, if there can be said to be one at all, is that its insurance coverage and other financial services are only available to those in the military or who are affiliated with the military through direct family ties. So that may eliminate it from consideration for a lot of people.

Amica Mutual, meanwhile, has no such barriers to entry. But the thing with Amica is that the first year tends to be very expensive because it is a mutual company. That simply means there are no shareholders and you become a part owner of Amica when you sign up for insurance. So that first year is basically you “buying into” the company. After that, customers typically get an annual premium rebate equal to about 20% of what they paid that year if they have no claims.

10 top-rated insurers

Consumer Reports took a look at the auto insurance industry by surveying nearly 24,000 readers in the winter of 2017 about their satisfaction on the claims process, the cost of premiums and the overall customer experience.

Here are the winners and losers, according to the magazine:

(#1 is best)

  1. Amica Insurance
  2. New Jersey Manufacturers Insurance Company
  3. USAA Property & Casualty
  4. Auto Club Group
  5. Erie Insurance Group
  6. PEMCO Mutual Insurance Company
  7. Auto-Owners Insurance Group of Companies
  8. Auto Club Enterprises Insurance Group
  9. Travelers Group

10 lowest-rated insurers

(#1 is worst)

  1. MAPFRE North America Group
  2. MetLife Auto & Home Group
  3. Mercury General Group
  4. Progressive Insurance Group
  5. Liberty Mutual Insurance Companies
  6. Nationwide Group
  7. Allstate
  8. Farmers Insurance
  9. Berkshire Hathaway Insurance Group (Geico)
  10. State Farm

Best auto insurers by region

So much of the auto insurance industry is local. Sure, you have the national players you see advertising on TV. We’re talking about the GEICOs, Progressives, Allstates, State Farms and others of the world. But many smaller insurers are regional and they’re among the best in the business, according to J.D. Power.

J.D. Power’s 2018 U.S. Auto Insurance Study surveyed nearly 45,000 customers across the country — almost twice as many as the Consumer Reports survey — from February-April 2018.

Here are their top insurers by region:

We’ve got a deeper dive with the Top 5 insurers in your region of the country right here.

How much should you expect to pay for an auto insurance policy?

According to an industry association analysis of data from the National Association of Insurance Commissioners, the average American paid $866 for a policy in 2014 — the latest year for which numbers are available.

Of course, that can vary greatly from state to state, where you’ll find everything from an average of $572 in Idaho to $1,264 in New Jersey!

Shopping your insurance every three years is a great way to save money. We’ll have more on that in a bit. But first, consider these factors on your current policy…

Your deductible is important

When it comes to car insurance, be sure the deductible you have isn’t too low. Take as high a deductible as you’re allowed to if you have a loan on your car. That’s usually $1,000.

Having a low deductible pushes premiums higher. It could also tempt you to make a claim for a small incident that will leave you in trouble with insurers going forward. More on that in a bit, too.

Pay attention to the level of coverage

State minimums for liability

If you have any assets in life to protect, you should think about going past the state minimums for liability.

If you own a home, have savings, etc., you do not want to do state minimums for liability. Why? Because that one time you hit a car in your blind spot or whatever the case may be, you can have serious exposure for liability.

The liability risk for fixing someone’s car is peanuts. The big money is when somebody is injured or says they’re injured. A lot of times people are able to dream up injuries from watching the ads on TV with the lawyers on who say they can get you big money when you’re involved in an accident.

You don’t want to fall into that trap if you have assets to protect.

Of course, if you have no assets and you rent a home rather than owning, then it’s acceptable if you want to just do state minimums.

Collision and comprehensive

Collision and comprehensive covers the damage to the car from a driving event or something else.

When do you need it and when should you drop it?

The general rule is when the cost of comp and collision exceeds 10% of your old vehicle’s value, that’s the time to dump it and just have liability coverage. You can determine your vehicle’s value at Edmunds.com, KBB.com or NADA.com.

So let’s take a simple example. Say your vehicle is worth $4,000. If you’re paying anything more than $400 annually (that’s 10% of $4,000) for comp and collision, it no longer makes any financial sense. One notable exception to this rule: If there’s no way you could financially cover the loss of your vehicle, forget the math and keep paying for comp and collision.

If you have a newer car, you need to have comprehensive and collision — along with that higher deductible of $1,000.

If you’re buying a new car and you can’t afford the $1,000 deductible, then you probably can’t afford the new car in the first place.

What you need to know about making a claim

You never want to make a claim on auto insurance for something small — like a cracked windshield or a broken side-view mirror — because the consequences are so ugly.

The insurer can surcharge you for a number of years; eliminate the discounts you would otherwise qualify for; or put a black mark on your C.L.U.E. report, a little-known industry database of claims. The latter effectively limits your ability to shop with the competition for 36 months.

The hidden dark side of roadside assistance

Auto insurers are great about offering add-ons to your policy that seem in theory like great conveniences at a great price. But using these seemingly benign “benefits” could marginalize you in the insurance marketplace and result in jacked-up rates!

Some auto insurers that offer roadside assistance treat your use of it as an at-fault claim and put that through on your C.L.U.E. report — even though you only needed a tow or the fix or a flat tire!

“It’s the Wild West with no rules on what insurers can decide to report on your C.L.U.E. report,” money expert Clark Howard says. “And you have no right of appeal either.”

So here’s the # 1 rule about roadside assistance: Never get it from your own insurer. Get it from AAA or elsewhere.

Read more: Emergency roadside assistance app is an alternative to AAA

Shopping around is the best way to get a lower rate

If your auto insurance is costing you too much, you’ve got to look around at other insurers. Here’s how to start the process…

Begin by identifying solid companies

Clark has long talked about the merits of Amica Mutual and USAA. But those aren’t the only two companies you should look at. Consider buying a one-time subscription to Consumer Reports and checking their latest list of the best auto insurance companies to find others that should make it onto your shortlist.

Get your quotes

Once you have a list of candidates, you’ll want to start getting quotes. This typically takes around 15 minutes on the phone per insurer. Have your most recent policy in front of you in case any questions come up about the make and model of your vehicle(s).

Working with an insurance broker is another option. He or she will get multiple quotes for you and you’ll have access to all the insurers they do business with. It’s an easy one-stop shop that lets you still have the flexibility of comparison pricing.

Compare quotes

Once you get the quotes back, it’s time to compare them. Each quote should be based on the same amount of coverage so you can do an apples-to-apples comparison. What if a poorly ranked company offers you a great quote? Clark says to avoid them! While the premium might be tempting, you want to be sure your insurer is there for you when the chips are down.

Don’t forget about discounts!

There are a ton of different discounts out there. Here are some you can ask about:

  • Antitheft devices
  • Multiple policies with the same company
  • College students living away from home
  • Defensive driving courses
  • Drivers ed courses
  • Low annual mileage
  • Long-time customer
  • More than one car
  • No accidents in three years
  • No moving violations in three years
  • Student drivers with good grades

More insurance stories on Clark.com:

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the #1 New York Times bestseller "Living Large in Lean Times."
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