Car insurance is legally required in most states, but it’s also a crucial financial safety net in the event of a collision or other damange — regardless of whether you’re at fault. In exchange for a monthly premium, the best auto insurance gives drivers peace of mind and potentially saves thousands of dollars. To determine the best car insurance companies of 2020, we analyzed the latest ratings from J.D. Power, AM Best, Consumer Reports and the National Association of Insurance Commissioners (NAIC). Then we used our proprietary rating system, the SimpleScore, to compare discounts, customer satisfaction, coverage options, digital accessibility and customer support for every major provider.
The 6 best car insurance companies of 2020
Amica Mutual – Best overall car insurance
State Farm – Best for customer support
Progressive – Best for discounts
The Hartford – Best policy options
Geico – Best for tech-savvy consumers
USAA – Best for members of the military
How to choose the best car insurance company for you
This isn’t Sisterhood of the Traveling Pants — your car insurance premium might not fit your best friend’s needs. Because of that, there isn’t one best car insurance company that is the right fit for every driver. Car insurance is regulated on a state level and coverage costs can vary based on where you live. Meaning your friend or neighbor may pay a different amount based on their location, selected coverage and driving history. If you’re thinking of switching car insurance companies and want to ensure you get the best coverage for your needs, here are the steps you should follow.
- Check your state-required coverage
In nearly all states, drivers are required by law to carry some form of car insurance or proof of financial responsibility. Every state has requirements for the level of insurance and the minimum amount of coverage each driver must have. For example, Virginia has minimum requirements for insurance, but drivers can bypass paying for an insurance premium by paying the state $500 each year. This fee doesn’t give the driver insurance, but it allows them to drive at their own risk. Use the Insurance Information Institute’s guide to determine the insurance requirements for your state.
After you’ve found what’s the minimum amount of insurance required for your state, you should next determine if you live in a no-fault or fault state. In a no-fault state, your car insurance will pay for your vehicle’s damages and your medical bills after an accident, regardless of who caused the crash. In a fault state, the person who causes the accident is responsible for covering the other driver’s losses.
No-fault states include: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah
[Read: What Does At-Fault Mean?]
- Know your deductible
Most coverage options will have a deductible –– the amount of money you have to pay out-of-pocket towards a covered loss before your insurance policy will step in. Collision, comprehensive and uninsured/underinsured motorist coverage will all have a deductible.
While you shouldn’t opt out of coverage options just to save money, there are times it just doesn’t make sense to have the extra coverage. A classic example is collision coverage. If your car’s value is too close to the deductible, you probably won’t get reimbursed from your insurance company after a loss.
Let’s say your car is worth $1,000 and your deductible is $1,000. If you get into an accident and your car sustains $800 worth of damage, you wouldn’t get an insurance payout because your deductible would cover the entire cost. It’s always important to determine which types of coverage make sense for you, but especially if you have an older car that’s low in value.
- Shop around
Risk isn’t the only factor that car insurance companies use to calculate your rate. Many insurers also use “price optimization,” meaning they set rates based on how much customers are willing to pay.
Large insurance companies analyze an enormous amount of customers’ personal data, such as social media posts, credit scores and even your online shopping habits. Then, they run the data through a proprietary algorithm that estimates how likely you are to shop around or just renew your existing policy each year. By doing so, they can increase your premium just enough to raise their profit margins without attracting your attention and prompting you to shop for a new policy.
Shopping around every year or two is the best way to avoid this practice and it will help you find the cheapest car insurance options. For most car insurance companies, getting a quote is an easy, online process that you can do in minutes. You’ll just need to provide information like your address, vehicle information and driving history. Even if you like your current car insurance company, they’re likely aware of your online activity, so the more quotes you get, the less likely you are to be tagged as someone who won’t jump ship for a better deal.
- Consider discounts
If you want a policy with a lot of additional coverage, the end price can feel a little overwhelming. Especially when you consider car insurance isn’t something you’re actively using every day. Capitalizing on the discounts providers offer is one way to ease that financial burden. When you’re shopping around, look for discounts that tailor to your needs. Here are some of the common discounts offered by most providers:
Defensive driving discount
Good driver discount
Low mileage discount
Safe driver discount
Multi-driver or multi-policy discount