How to Find the Best Auto Insurance

Before you can start searching online for the best car insurance for you, think about your unique needs, which affect how much your car insurance will cost.¹

• Where you live: What state you reside in impacts your car insurance policy. There is a national average rate as well as separate average rates for the 50 states and Washington, D.C. Insurers also consider whether you live in an urban, suburban or rural area within a state. A more densely populated area could translate into more road congestion and a higher probability of accidents. Also, if other drivers in your zip code file more auto insurance claims, you could pay a higher premium, making urban areas more expensive for car insurance compared to rural and suburban areas.
• How many vehicles you have: The more vehicles you insure, the higher your premium will be, although many auto insurance companies give discounts for multiple-vehicle policies.
• How much you drive your vehicle: How many miles you put on your vehicle each year will have a bearing on your auto insurance rate.
• Household drivers: The number of people residing in your household who drive your covered vehicles will impact your premiums. Younger drivers cost more to insure than older drivers, typically.
• Driving history: Did you know that having a past car accident will affect your auto insurance premiums? Most car insurance companies consider your driving history when providing cost estimates.
• Add-ons: Special needs, such as having a classic car or operating your vehicle as a rideshare, can increase auto insurance rates as well.

Here are the five third-party rating services you should check before signing with an auto insurance company.

1. J.D. Power: JD Power rates auto insurance in two ways — via an auto claims satisfaction survey and an insurance shopping survey.² The auto claims satisfaction study surveys insurance customers who have settled claims within the past six months. The insurance shopping study provides insight into each part of the shopping funnel based on responses from thousands of insurance customers who sought auto insurance quotes within the past nine months.
2. AM Best: AM Best provides ratings based on a company’s financial strength, long-term issuer credit, short-term issuer credit, and issue credit.³ The company bases its ratings on a comprehensive quantitative and qualitative evaluation of an insurer’s operating performance, business profile, balance sheet strength, and enterprise risk management.
3. Standards & Poor’s: Standards & Poor’s Global Ratings (S&P) measures creditworthiness through high-quality independent expert opinions.⁴ For auto insurance, S&P rates the likelihood the insurance company can and will pay out your claim in a timely fashion. The company’s scores run from AAA (extremely strong) to D.
4. Better Business Bureau: The Better Business Bureau (BBB) accredits companies, including those in the auto insurance industry, via a comprehensive set of best practices related to how the business interacts with the public.⁵ The accreditation is based on information the BBB obtains about the business from public data sources and the company itself.
   • Separately, BBB displays company ratings according to customer complaints on its website. Only businesses with a B or better rating can apply to be accredited. If the rating falls below B, the business could lose its accreditation if it fails to address the issues related to the lower number.
5. The National Association of Insurance Commissioners: The National Association of Insurance Commissioners (NAIC) has a Complaint Index Score to track the number of complaints that customers filed versus insurance premiums that companies wrote.⁶ A lower score means fewer customer complaints. For example, in January 2023, Nationwide’s 0.65 overall NAIC Complaint Index Score meant the company had gotten fewer complaints than the average car insurance provider, which is at a 1.

In searching online for the best auto insurance, you’ll need to consider what type of coverage and the amount of coverage you need. Here are the basic types of coverage.

• Liability coverage: Liability coverage encompasses two main areas — bodily injury and property damage. Liability coverage pays for the other person’s property damages and personal injuries for at-fault accidents. For bodily injury, your coverage should be at least $100,000 per person and $300,000 per accident. Property damage limits should have a $100,000 minimum.
• Collision coverage: This type of coverage reimburses you for vehicle damage or damage to your own property when the accident was your fault. Collision insurance covers the insured car’s actual cash value.
• Comprehensive coverage: This provides reimbursement for damages not stemming from collisions, such as theft, falling rocks, floods, fires, and vandalism. You should set a limit of your vehicle’s actual cash value for comprehensive coverage.
• Medical payments: Also called MedPay, this type of coverage pays medical expenses for the insured driver, any other driver listed on the policy, household members of the insured, and passengers. MedPay is mandatory in Maine and Pennsylvania. The coverage pays out between $5,000 and $10,000 per person on average.
• Personal injury protection: Often referred to as PIP, this covers any medical expenses you or your passengers might incur from an accident. This coverage includes lost wages from missing work. For PIP, you should have between $10,000 and $30,000 per person in coverage. The following states require PIP as part of your auto insurance policy: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah.
• Uninsured/underinsured motorist: Uninsured/underinsured motorist coverage should also be at least $100,000. This coverage reimburses you for property damages or bodily injuries from motorists without insurance or with inadequate insurance. Uninsured motorist coverage includes hit-and-run accidents as well.

These are some of the other factors you should look into when buying auto insurance:

• What you can skip: Depending on your vehicle, there is coverage you could forego on your policy. For example, vehicles 10 years and older don’t need comprehensive and collision coverage, generally, because they aren’t worth as much as newer vehicles, so an accident would likely mean they’d be declared a total loss. After the deductible, the actual cash value would be so low that reimbursement for a replacement may not be worthwhile.
• Special needs: If you have an antique or custom-built car, you’ll need special insurance to cover the vehicle. Make sure the company will also provide coverage if you use your vehicle to give rideshares. Other special insurance needs include coverage for ATVs, RVs, and motorcycles.

Nearly every insurance company offers discounts as a way to lower auto insurance premiums. Here’s a list of the most popular discounts available:

• Active or retired federal employees
• Annual premium payment in one lump sum, or automatic payments
• Drivers who have taken defensive driving or driver’s education courses
• Full-time students with good academic records
• Good drivers who have been accident-free for a certain number of years
• Having multiple insurance policies at the same auto insurance company (e.g. life insurance or homeowners insurance)
• Insured vehicles that have air bags, anti-lock brakes, anti-theft systems, or daytime running lights
• Active military members and veterans
• Multiple vehicles on the same policy

There’s more to car insurance than a good quote. If the customer service experience is lousy, you’ll struggle with filing claims or getting answers to your questions. Consider these three areas when rating a company’s customer service.

• Contact methods: See if the company provides multiple ways to connect with customer service representatives, such as by phone, online chat, or email. Third-party ratings can also provide clues as to how responsive the company is to current customers, such as if they experience long hold times or unanswered emails.
• Online presence: You should be able to find information on the company’s website or online customer portal. Additionally, the company should provide answers to frequently asked questions, or blog posts, to educate its customers further.
• Mobile app: The company’s mobile app should be fairly robust and should offer customers a quick way to access their insurance documents, pay their bills, and file claims.

When searching for the best auto insurance, it’s helpful to use a website like AutoInsurance.com to compare quotes. However, to make the most of the comparison, you’ll need to make sure you’re comparing similar coverage.

Finding the best auto insurance for you doesn’t have to be time-consuming or difficult. By following the steps outlined in this article, you’ll soon have plenty of options for insuring your vehicles.