Looking for the best auto insurance companies? A huge percentage of people never shop their car insurance needs — and that’s a bad idea.
The reality is that modern American business punishes you when you stay loyal to a company, rather than rewarding you.
Best Car Insurance Companies: Which 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 its 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.”
Technically, USAA had the highest score in every single region of the country, according to J.D. Power’s latest study on auto insurance. But USAA didn’t make it into the official rankings because it didn’t meet the study’s criteria.
And that goes to the very heart of the downside with USAA. You have to be a veteran, currently serving in the U.S. military or affiliated with the military through direct family ties to be eligible for services USAA offers.
So that may eliminate USAA from consideration for a lot of people. You can read more about USAA eligibility here.
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 during your first year as a customer.
When you join a mutual company like Amica, there are no shareholders as 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, you’re basically 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) became the first company to earn the J.D. Power Personal Auto Claims Certification, a feat it has repeated for two years running.
The certification “recognize[s] brands that provide exceptional claims experience in the automobile, property and small commercial segments.”
NJM expanded its service to Pennsylvania in 2018. That opened up the company to a bigger potential auto insurance customer market in the Mid-Atlantic.
Because NJM is a mutual company, policyholders get an annual dividend 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 to get a read on the best auto insurance companies is the Consumer Reports rating of auto insurers.
The most recent survey, conducted between 2014 and 2018, asked more than 90,000 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 magazine’s rankings:
(#1 is best)
- USAA Group
- NJM Insurance Group
- Amica Mutual Group
- PEMCO Mutual Insurance Company
- Automobile Club of Southern California
- Erie Insurance Group
- California Casualty Group
- Chubb INA Group
- West Bend Mutual Insurance Company
- Electric Insurance Company
Consumer Reports: 10 Lowest-Rated Auto Insurers
(#1 is worst)
- Esurance Property and Casualty Insurance Company
- Nationwide Group
- Liberty Mutual Insurance Companies
- Allstate Insurance Group
- Kemper PC Companies
- MetLife Auto & Home Group
- Farmers Insurance Group
- Horace Mann Insurance Group
- Hanover Insurance Group Property & Casualty Companies
- National General Companies
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 2020 U.S. Auto Insurance Study surveyed more than 40,000 customers across the country — less than half as many as the Consumer Reports survey — from February-March 2020.
This annual study examines customer satisfaction in five factors (in alphabetical order):
- Billing process and policy information
- Policy offerings
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 its top insurers by region. We’ve listed only those that scored higher than the average in their respective regions. So you’ll see a different number of entries depending on which part of the country the companies operate.
J.D. Power: Best and Worst Auto Insurers on the National Level
In addition to its regional rankings, J.D. Power also publishes an annual shopping satisfaction study. It looks at the national picture when it comes to the most satisfying purchase experience.
The organization surveyed more than 14,300 auto insurance customers who requested a quote between April 2019 and January 2020. Here are the rankings:
J.D. Power: 10 Top-Rated Large and Mid-Size Auto Insurers
(#1 is best)
- The Hartford
- Erie Insurance
- American Family
- Automobile Club Group
- Auto-Owners Insurance
- CSAA Insurance Group
- Amica Mutual
J.D. Power: 10 Lowest-Rated Large and Mid-Size Auto Insurers
(#1 is worst)
- Auto Club of Southern California Insurance Group
- Liberty Mutual
- State Farm
Clark’s Advice When Shopping for a New Auto Insurance Policy
Clark says that 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) and your current coverage.
Working with an insurance broker is another option. You can get multiple quotes, and you’ll have access to all the insurers the broker does business with. It’s an easy one-stop-shop that still gives you the flexibility of comparison pricing.
Once you get the quotes, 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 money in 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.
If you have no substantial assets and you rent a home rather than owning, then the state minimum level of coverage is acceptable.
RELATED: How Much Car Insurance Do I Need?
If you’re really price-sensitive and find that all the top-tier insurers are too expensive for your budget, you still have a couple of options:
- Raise your deductible.
- Consider dropping comprehensive and collision coverage on older vehicles
It’s often good to take as high a deductible as you’re allowed (usually $1,000) if you have a loan on your car.
Having a higher deductible will usually stop you from making small claims. That’s good because those claims can drive your rate up!
Meanwhile, when the cost of comp and collision exceeds 10% of your vehicle’s value, that’s the time to dump it and carry only 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 discounts available for a lot of different things. 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 on buying 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.