Home Insurance The Best Car Insurance Companies of 2023

The Best Car Insurance Companies of 2023

The Best Car Insurance Companies of 2023
Photo / thedrive

According to our analysis, American Family (AmFam) is ranked as the best car insurance company. Their average annual rate for good drivers is $2,176, which is not the cheapest among the companies we analyzed. However, AmFam provides numerous discounts to help drivers obtain lower rates.

photo / thedrive

AmFam offers optional coverages and add-ons, such as accident forgiveness, new car replacement, and a diminishing deductible. For the AmFam diminishing deductible, policyholders receive a $100 credit at the policy’s start (or $50 for 6-month terms). Each year they go without making a claim, their deductible decreases by $100, with a maximum credit of $500. This means a $500 deductible can be reduced to $0 if a person remains claim-free for five years.

Considering the customer experience, American Family stands out with the lowest number of consumer complaints among the insurers we analyzed. This data is based on the National Association of Insurance Commissioners (NAIC) complaint index.

Best car insurance company for liability-only coverage

The best car insurance for liability-only coverage is provided by Auto-Owners, USAA, and Westfield. Each of these companies offers liability coverage below the national average and has received top ratings in our analysis.

Auto-Owners stands out for having the most affordable liability-only coverage, with an average yearly rate of $404. However, USAA closely follows with an average rate of $466 per year.

Liability insurance is mandatory in most states, and it covers the injuries and property damage of the other party if you are at fault in an accident. Unlike full coverage, a liability-only car insurance policy does not include additional protections like personal injury protection (PIP) or collision and comprehensive coverage.

Best liability-only car insurance companies


Best car insurance company for senior drivers

Among the three insurers, Nationwide stands out with the most affordable rates for senior drivers. Their average yearly rate is $1,397, equivalent to $116 per month.

Their average monthly rate is $1,551, making it another viable option.

Best senior car insurance companies

American Family$1,970$164

Best car insurance company for teen drivers

The two best car insurance companies for teen drivers are USAA and American Family. USAA mainly serves the military community and offers an average teen driver coverage cost of $1,293 per year for policyholders. Not all drivers are eligible for USAA coverage, but if you’re not, you can consider American Family as an option.

Adding a teen driver (ages 16 to 19) to your American Family car insurance policy costs an average of $1,556 per year. When you add a teen to your policy, most car insurance companies tend to increase rates due to their higher risk as less experienced drivers.

However, there are ways to reduce the cost of coverage, such as seeking discounts offered by many companies for teens with good grades. Another way to potentially get discounts is by leaving the vehicle at home while they’re living on campus if the teen is in college.

Certain safety features in vehicles, like backup cameras or lane assist sensors, may also qualify for discounts. For teen drivers, cars equipped with crash avoidance features like lane departure and blind-spot sensors can be beneficial, as per a study by The Insurance Institute for Highway Safety.

Make sure to inform your insurer if the car your teen drives has these safety features.

ALSO READ  How to Get Affordable Renters Insurance in 2023

Best average rates for adding a teen drivers

American Family$1,556$130

Best car insurance company for bundling with home insurance

American Family, State Farm, and USAA are all top choices for bundling auto and home policies. Among these three companies, State Farm stands out by offering the most substantial discount, providing up to 18% off on premiums for a home and auto bundle.

Aside from State Farm, Nationwide and Auto-Owners are also recognized for their excellent home and auto bundles. One of the most significant discounts you can get from your insurer comes from bundling policies together.

By purchasing two types of insurance from the same provider, such as auto and home insurance (or other combinations like auto and renters insurance or auto and condo insurance), you can enjoy significant savings on each policy. According to Mark Friedlander, spokesperson for the Insurance Information Institute, the amount you can save typically ranges from 10% to 20% of the annual premium, depending on your insurer.

Best average savings for bundling home and auto insurance

American Family18%
State Farm23%

Best car insurance company by customer complaints

American Family stands out among car insurance companies due to having the least amount of consumer complaints. This fact is determined based on the NAIC complaint index. In this index, each state logs any filed complaint for review.

Typically, the industry average complaint index is 1.0, and scores below that are considered below average. However, American Family goes even further with an impressively low score of 0.16, classified as “very low.”

Complaint level by car insurance company

American FamilyVery low$2,1765.0 Stars
TravelersVery low$1,8524.5 stars
NationwideVery low$2,0415.0 stars
WestfieldVery low$1,7594.5 stars
ProgressiveLow$2,1573.5 stars
Auto-OwnersLow$1,6285.0 stars
State FarmLow$1,9593.5 stars
AllstateLow$3,0003.5 stars
FarmersLow$2,3813.5 stars

Average annual car insurance rates by state

American Family has a low number of consumer complaints regarding car insurance. Car insurance rates differ from one state to another and even among ZIP codes. The average cost of car insurance for a responsible driver is available for each state.

Average annual cost of car insurance by state

New Hampshire$478$1,411
New Jersey$1,119$2,240
New Mexico$413$2,104
New York$1,016$4,769
North Carolina$455$1,307
North Dakota$351$1,319
Rhode Island$682$2,715
South Carolina$755$2,387
South Dakota$301$1,821
West Virginia$477$1,688
Minimum coverage rates are based on the minimum amount of auto insurance required in each state. Full coverage rates are based on liability coverage of 100/300/100 ($100,000 in bodily injury liability per person, $300,000 per accident and $100,000 in property damage liability), uninsured motorist coverage and collision and comprehensive insurance with a $500 deductible. Source: Quadrant Information Services.

States with the most summer driving fatalities

Summer poses the highest risk for road accidents in the U.S. The occurrence of fatal crashes during the summer months escalated by nearly 40% in certain states, comparing statistics from 2018 to 2021. States like Rhode Island, Minnesota, and New Jersey witnessed a significant surge in fatal crashes from June to August. Nationally, there has been a 24% increase in fatal crashes caused by speeding.

ALSO READ  Abrdn Exits Joint Venture with HDFC Life, Showcasing Maturing Indian Insurance Market

Before embarking on your summer journeys, it is crucial to review your car insurance policy to ensure sufficient coverage in case of an accident. Financial protection is essential if you are involved in a crash.

How much does car insurance cost?

The average annual car insurance rate for good drivers is $2,067, which amounts to around $172 per month, as per our analysis.

The cost of your coverage is influenced by various factors, such as:

  1. The type of coverage you choose to purchase.
  2. The coverage limits you select.
  3. The deductible you opt for, if applicable.
  4. Your age.
  5. Your gender (excluding California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania).
  6. Your location.
  7. Your claims history.
  8. Your car insurance history.
  9. Your credit-based insurance score (excluding California, Hawaii, Massachusetts, and Michigan).
  10. The make, model, and age of your vehicle.
  11. Any special equipment or features installed in the car.

Average annual rate based on driver profile

Good driver$2,067USAA*$1,412
After an accident with injury$2,897USAA*$2,093
After an accident with property damage$2,844USAA*$2,079
After a DUI$3,454USAA*$2,751
After a speeding ticket$2,502USAA*$1,709
Poor credit$3,629Geico$2,426
Adding a 16-year-old driver$2,512Erie$1,594
Young driver (18 to 25)$4,521USAA*$2,774
Senior driver$2,323USAA*$1,554
After a gap in coverage$2,584Auto-Owners$1,763
*USAA coverage is only available to members of the military, veterans and their families.

What is car insurance? 

Car insurance is an agreement between you and an insurer. It provides financial protection in case of an accident or a covered incident. In return for a premium or regular payment, your insurer will cover financial losses resulting from a covered accident or incident.

The coverage you have will determine what car insurance can help with. It can cover expenses related to injuries for you and your passengers. It can also cover injuries for another driver, their passengers, and pedestrians involved in an accident. Additionally, if you’re at fault for an accident, it can help with repairing or replacing another driver’s vehicle. It can also cover the repair, replacement, or theft of your own vehicle.

Furthermore, car insurance can assist with legal expenses if you face a lawsuit following an accident.

What types of car insurance do I need?

Most states mandate liability car insurance for motorists. However, the coverage requirements can vary based on your location and whether you finance your vehicles. In some cases, you might need to purchase additional types of coverage. Let’s explore the different types of car insurance you should consider.

Liability insurance is the primary coverage that every driver needs. It takes care of the costs incurred by other drivers and their passengers if you are at fault in an accident. Additionally, it covers your legal defense and any judgments or settlements resulting from a lawsuit.

This type of insurance is divided into two parts: Bodily injury (BI) liability and Property damage (PD) liability. BI liability covers medical expenses for the other driver, their passengers, or a pedestrian injured in an accident you caused. It can also help with your legal expenses if you face a lawsuit after the accident.

ALSO READ  Best COVID Travel Insurance Companies of 2023

PD liability, on the other hand, covers the cost of repairing or replacing another person’s property, such as their vehicle, if it was damaged in an accident caused by you.

Liability insurance is a mandatory requirement in all states, except for New Hampshire and Virginia. However, even in those states, you might still need coverage in specific situations.

Uninsured motorist/underinsured motorist insurance

Uninsured motorist (UM) insurance provides coverage for you and your passengers. It protects you in case of an accident caused by an uninsured driver or a hit-and-run incident. Additionally, in certain states, this insurance may also cover the expenses of repairing or replacing your vehicle, if it was damaged by an uninsured driver.

If you get into an accident with a driver who lacks sufficient insurance to cover the costs, underinsured motorist (UIM) insurance comes into play. It offers similar coverage to UM insurance in these situations.

Some states mandate UM coverage, while in others, it may not be obligatory. Despite the requirements in your state, insurance experts highly recommend adding this coverage to your policy for better protection.

Collision coverage

Collision coverage is essential for your vehicle. It covers repairs or replacements when your car collides with an object, such as another vehicle, fence, or tree. This coverage also applies to hit-and-run incidents and roll-over accidents.

While collision coverage isn’t legally required in any state, it may be necessary if you’re financing your car. Lenders or lessors often make it a requirement. Typically, collision coverage comes bundled with comprehensive car insurance.

Comprehensive coverage

Comprehensive car insurance coverage provides reimbursement for various types of losses. It includes damages caused by events other than crashes, such as theft and damage from hail, flooding, fire, vandalism, and collisions with animals or falling objects like rocks or tree limbs. These incidents are typically unforeseen and unavoidable.

While comprehensive coverage is not mandated at the state level, it is often a necessary requirement if you have financed your vehicle.

Personal injury protection

Personal injury protection (PIP) provides coverage for medical expenses resulting from an accident. This includes you, your passengers, and family members living in your household, regardless of fault. PIP can also compensate for lost wages and everyday services, such as childcare, if the accident leaves you or your passengers unable to perform these tasks.

Some states require PIP in “no-fault” or “choice no-fault” systems, while others do not offer this coverage.

Medical payments coverage

Medical payments coverage, also known as MedPay, provides coverage for medical bills resulting from accidents. It applies to both you and your passengers, regardless of fault. The coverage includes various medical expenses like doctor visits, ambulance services, X-rays, surgery, and even funeral fees.

MedPay is mandated in certain states and shares similarities with PIP (Personal Injury Protection). However, its scope is limited solely to medical expenses and does not extend to cover lost wages or replacement services.

How to save on car insurance

Here are some tips to help you find more affordable car insurance:

  1. Take advantage of available discounts from your insurer. Inquire about potential discounts, such as those for being a good driver or bundling home and auto insurance.
  2. Consider participating in usage-based programs. These programs monitor your driving habits, potentially leading to lower rates if you drive safely or infrequently, depending on the program’s criteria.
  3. Maintain a safe driving record. Having a good driving history without any traffic violations can often lead to lower insurance rates.
  4. Aim to stay claims-free for a specific number of years. Many insurers offer cheaper car insurance rates as a reward for not making claims over time.
  5. Keep your credit score in good shape. Insurers often consider your credit score when calculating your premium, so maintaining a strong credit score can result in cheaper car insurance.
  6. Evaluate the option of selecting a higher deductible. Opting for a higher deductible can reduce your rates, but it means you’ll receive a smaller payout in case of a claim.
  7. Always shop around and compare car insurance quotes regularly. This ensures you’re getting the best possible deal for the coverage you need.

Lastly, consider looking into personal injury protection coverage, which can offer additional financial protection in the event of an accident.

Find the best car insurance for your needs

To find the best car insurance company for your needs, begin by identifying the specific types of car insurance coverage you require. After that, obtain multiple car insurance quotes from different companies to make a comparison.

Additionally, consider exploring options like personal injury protection, which can provide additional coverage and benefits in case of an accident or injury. Taking the time to research and compare various insurance plans will help you make an informed decision that suits your unique requirements.

Determine the type and amount of car insurance coverage you want

  • When buying car insurance, ensure it meets the minimum requirements set by your state.
  • If you have financed your vehicle, consider lender requirements, which might include collision and comprehensive coverage.
  • After meeting state and lender requirements, think about additional coverage options you might want.
  • For example, when financing a new car, gap insurance could be worth considering until you pay off your auto loan.
  • Be cautious about purchasing unnecessary coverage, as it can lead to high premiums.
  • On the other hand, not having enough coverage might leave you financially vulnerable in case of a collision.
  • One type of coverage to consider is personal injury protection, which can provide added financial security in certain situations.

Get and compare car insurance quotes

  • Obtaining multiple quotes is crucial to understanding which companies align best with your needs and preferences. This aspect holds greater significance than merely focusing on the lowest price.
  • Friedlander recommends acquiring at least three quotes from a mix of national and regional insurers. This allows for a direct comparison of costs and coverage on an equal basis.
  • Quotes can be obtained through various channels, including online platforms, independent and exclusive insurance agents, as well as directly from insurers.
  • Another valuable consideration is checking for eligibility for potential discounts, such as those for home and auto bundling or being a good student.
  • Personal injury protection is also a vital aspect to keep in mind during the insurance evaluation process.