Looking for the best auto insurance? A huge percentage of people never shop their car insurance needs — and that’s a bad idea, considering that modern American business punishes you when you stay loyal to a company, rather than rewarding you.
Best car insurance: Which insurers to shop and which to skip!
You’ve seen the car insurance ads on TV promising 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 both customer complaints and customer satisfaction after a claim is made.
If you’re looking for the best auto insurance coverage, here’s who to check out and who to avoid…
Best and worst auto insurers: Table of contents
- Clark’s top 3 picks for car insurance
- Consumer Reports: 10 top-rated auto insurers
- Consumer Reports: 10 lowest-rated auto insurers
- J.D. Power: Best auto insurers by region
- J.D. Power: Best auto insurers on the national level
- Clark’s advice when shopping for a new auto insurance policy
Clark’s top 3 picks for car insurance
However, if you live in Pennsylvania or New Jersey, he also likes NJM Insurance Company (NJM) because of their proven track record.
“Historically, these companies offer the best claims experience,” Clark says. “The whole thing about insurance is not necessarily to have the lowest premiums, but to have the coverage you need if something goes wrong — and these companies all excel in that respect.”
But the downside with USAA, if there can be said to be one at all, is that the insurance coverage and other financial services it offers are only available to those in the military or who are affiliated with the military through direct family ties.
So that may eliminate USAA from consideration for a lot of people.
2. Amica Mutual
Unlike USAA, Amica Mutual has no artificial barriers to entry. But because Amica Mutual is a mutual company, it tends to be very expensive the first year you join.
When you join a mutual company like Amica, there are no shareholders like there are with other public companies. You become a part owner of the company when you sign up for insurance.
So that first year, with the higher upfront costs, 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, subject to how the company is doing financially.
3. NJM Insurance
Also a mutual company, New Jersey Manufacturers Insurance Company (NJM) boasts in its press releases that it generally beats other insurers’ premiums in the Garden State by 20%, according to N.J. insurance regulators.
In addition, NJM recently became the first company to receive the J.D. Power Personal Auto Claims Certification. The newly created certification “recognize[s] brands that provide exceptional claims experience in the automobile, property and small commercial segments.”
Last year, NJM expanded its service to Pennsylvania, now opening itself up to an even bigger potential auto insurance customer market in the Mid-Atlantic.
And, of course, being a mutual company, policyholders get an annual dividend back from NJM each year.
For example, auto insurance customers received a regular dividend of 5%, applied as a credit upon renewal, and a special dividend of 5% sent as a check during a recent year.
Consumer Reports: 10 top-rated auto insurers
One of the annual studies that Clark watches closely is the Consumer Reports rating of auto insurers.
The most recent survey, conducted in late 2017, asked nearly 24,000 readers about their satisfaction with the claims process, the cost of premiums and the overall customer experience with a number of insurers.
Here are the winners and losers, according to the magazine:
(#1 is best)
- Amica Insurance
- New Jersey Manufacturers Insurance Company
- USAA Property & Casualty
- Auto Club Group
- Erie Insurance Group
- PEMCO Mutual Insurance Company
- The Cincinnati Insurance Company
- Auto-Owners Insurance Group of Companies
- Auto Club Enterprises Insurance Group
- Travelers Group
Consumer Reports: 10 lowest-rated auto insurers
(#1 is worst)
- MAPFRE North America Group
- MetLife Auto & Home Group
- Mercury General Group
- Progressive Insurance Group
- Liberty Mutual Insurance Companies
- Nationwide Group
- Farmers Insurance
- Berkshire Hathaway Insurance Group (Geico)
- State Farm
J.D. Power: Best auto insurers by region
Like Consumer Reports, J.D. Power publishes another respected tally of customer satisfaction in an effort to determine which company offers the best car insurance.
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.
The reality is while you have national players advertising on TV — we’re talking about GEICO, Progressive, Allstate, State Farm and others — so much of the auto insurance industry is local.
In fact, many of those smaller regional insurers are among the best auto insurers in the business, according to J.D. Power.
Here are their top insurers by region. We’ve only listed those that score higher than the average in their region, so you’ll see between two to five entries depending on which part of the country you’re in.
We’ve got a deeper dive with the Top 5 insurers in your region of the country right here.
J.D. Power: Best auto insurers on the national level
In addition to regional rankings, J.D. Power also publishes an annual auto claims satisfaction study that looks at the national picture when it comes to the best car insurance.
The organization surveyed nearly 11,000 auto insurance customers who made a claim within the past six months from November 2017 through August 2018 before taking the survey. Claims such as glass/windshield damage, auto theft and roadside assistance were not included in the study.
J.D. Power: 10 top-rated auto insurers
- Erie Insurance
- Amica Mutual
- Auto-Owners Insurance
- Auto Club of Southern California Insurance Group
- The Hartford
- State Farm
J.D. Power: 10 lowest-rated auto insurers
(#1 is worst)
- MAPFRE Insurance
- CSAA Insurance Group
- Liberty Mutual
- American Family
- 21st Century
The thing Clark notes about the best-performing auto insurers in this tally is how similar they read to the Consumer Reports list.
“I just think it’s interesting that it’s so close year after year in what both groups find, and who people say do a good job meeting their needs as customers,” Clark says.
Clark’s advice when shopping for a new auto insurance policy
According to an industry association analysis of data from the National Association of Insurance Commissioners, the average American paid $857.44 for a 12-month policy in 2017 — the latest year for which numbers are available.
Shopping your insurance every three years is a great way to save money. Here’s how to start the process…
Get your quotes
Once you have a list of candidates culled from the ratings above, you’ll want to start getting quotes.
This typically takes around 15 minutes on the phone or online for each 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.
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.
One word of advice: If you own a home, have savings, etc., you definitely want more than the 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.
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.
If you still need to lower the cost of your auto insurance even more, there are two approaches you should consider taking: Raise the deductible and/or consider dropping comprehensive and collision coverage on older vehicles.
On that first point, when it comes to car insurance, it’s often a good to take as high a deductible as you’re allowed to if you have a loan on your car — usually $1,000.
When you have a higher deductible coming out of your pocket before insurance kicks in, that will usually stop you from making small claims that can later drive your rate up!
Meanwhile, 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.
Don’t forget to ask about discounts!
There are a ton of different discounts out there. Here are some you can ask about:
- Anti-theft 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
The decision when you’re looking for the best auto insurance comes down to more than just price; you’ve also got to consider customer satisfaction and complaints and a company’s reputation for making its customers whole — which is the point of insurance in the first place.
“Sometimes you’re better off paying a little more to be with a quality insurer who will be there when the chips are down,” Clark says.