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When you own a car and have a driver's license, most states require you to have auto insurance. It's one of the responsibilities of car ownership to protect yourself and those around you when on the road. But how do you pick the best one?
Read on to discover the best insurance companies for different types of drivers and learn the pros and cons of each so that you can make an informed decision when picking your next auto insurance.
Best Overall: Amica
Why We Chose It: Amica auto insurance had one of the best overall customer satisfaction scores in the 2020 J.D. Power Auto Claims Satisfaction Study and policyholders can receive up to 20 percent back on their annual premiums as dividends.
High customer satisfaction and claims ratings
Earn up to 20 percent of premiums back in dividends
The oldest mutual insurer of automobiles in the U.S.
Insurance not available in Hawaii
Dividends are not available in every state
First-year policies can be higher without dividends applied
Amica might be one of the best auto insurance companies that you've never heard of. It started in 1907 and is known for its financial strength and exceptional customer service. With over $5 billion in assets and 1.6 million policies, AM Best rates Amica's financial strength as A+ (Superior). J.D. Power's 2020 Auto Claims Satisfaction Study ranked its second, which is the highest rating of any nationwide auto insurer. The NAIC Complaint Index shows Amica as better than the average auto insurer for two of the past three years, as of March 2021.
The company is a direct writer of personal insurance for your vehicle, home, boat, and a variety of other needs. As a mutual insurance company, Amica shareholders (aka customers) can receive a dividend on their annual premiums of 5 percent to 20 percent. The dividend can be applied to future premiums or sent as a payment to you. A number of discounts are available for loyalty, bundling, student, and multi-car discounts. Young drivers may even receive a legacy discount when their parents have been insured by Amica for at least five years.
Best for Discounts: Geico
Why We Chose It: By using Geico's DriveEasy app, customers can save money on their premium based on how safe they drive.
Save money just for registering in the company's DriveEasy app
Additional savings based on how safe you drive
97 percent customer satisfaction rating
Riskier drivers may see a higher rate
DriveEasy not available in all 50 states
Savings can be taken away if not all drivers participate in tracking via the app
Geico, which Berkshire Hathaway acquired in 1996, is the second-largest private passenger auto insurer in the U.S. Geico's financial strength is rated A++ from both AM Best and Standard and Poor's, and J.D. Power ranks it No. 1 in customer satisfaction in the Northwest and North Central Regions.
Customers have received affordable car insurance from Geico for over 75 years. Geico claims that new customers report average annual savings of $500 when switching from their old insurer. Customers are eligible for a number of discounts based on vehicle equipment, driving history, loyalty, affiliations, and driver's education. The DriveEasy mobile app (available in 20 states as of March 2021) tracks how many miles you drive and your safe driving habits, including using your phone while behind the wheel. While passive use of the phone is OK (e.g. hands-free phone calls), active use is discouraged (e.g. holding it or tapping it). The app assigns drivers a safe driving score, which the company uses to offer you better rates.
Best for High-Risk Drivers: Progressive
Why We Chose It: Progressive offers a Name Your Price Tool, which allows customers to find coverage that fits their budget while also meeting each state's minimum requirements. High-risk drivers can receive discounts by adopting safer driving habits and using Progressive's Snapshot program.
Compare Progressive's rates vs. competitors' on its website
Lower-than-average rates for DUIs and at-fault accidents
Snapshot drivers save an average of $145 per year
Ranks in the bottom half for customer satisfaction on claims
BBB reviews give Progressive only 1 star
Getting a quote over the phone leads to a higher price than online quotes
Progressive was started in 1937 in Cleveland, Ohio, by two friends. It is now the No. 3 auto insurer in the U.S. with more than 21 million policies. Progressive is rated A+ (Superior) by AM Best and AA by Standard and Poor's.
People with high-risk driving records will like Progressive's Name Your Price tool. You can give it a budget, and the app will return various options for that premium. Additional savings are available with the Snapshop program. Customers who sign up receive an average discount of $47 just for doing so. The average Snapshot customer saves $145 per year. If you're unsure of how your driving would be priced, the Snapshot Road Test logs your driving for 30 days so you'll know what your premiums would be before switching from your current insurer.
Best for Young Drivers: Nationwide
Why We Chose It: Nationwide is the best auto insurance company for young drivers because it offers flexible monthly premiums based on vehicle usage through its SmartMiles program. This is very attractive to students who may not drive much while at school, but still want to be covered at an affordable price.
Automatic 10 percent discount when signing up for SmartRide
SmartMiles program offers flexible monthly premiums based on vehicle usage
Discount for students who earn a "B" average in classes
Not available in every state
Claims' satisfaction rate is lower than competitors
Low ratings from Consumer Reports
Nationwide began as a small mutual auto insurance company in 1926. Since then, it has done more than $49 billion in sales to customers across over 46 states and Washington, D.C. Nationwide is ranked A+ (Superior) by AM Best and A+ by Standard & Poor's. The company offers a full line of insurance, investing, and banking products.
Young drivers should sign up for Nationwide's SmartRide program. This usage-based system tracks their driving patterns and time behind the wheel. Customers receive a 10 percent discount for signing up and up to a 40 percent discount by driving safely. Drivers who are students may earn a discount by maintaining a "B" average and by joining certain alumni associations. Nationwide is also a good choice for young drivers with a short credit history because the penalty for below-average credit scores is low compared to those with excellent credit.
Best for Seniors: State Farm
Why We Chose It: State Farm provides affordable rates, nationwide availability, and dependable customer service. With discounts for safe driving, safe vehicles, and customer loyalty, seniors can find affordable premiums on their auto insurance.
More than 19,000 agents across the U.S. for in-person service
Largest market share of any auto insurer in 2019
Ranks highly for claims satisfaction
Does not offer accident forgiveness
Rates can be higher than competitors if you don't qualify for discounts
Policies sold exclusively through agents
State Farm began selling auto insurance in 1922 and has expanded to have 84 million policies in place, of which 44 million are auto policies. It has been the No. 1 auto insurer in the U.S. since 1942. Senior drivers can benefit from lower premiums with discounts for being accident-free, taking a defensive driving course, driving a safe vehicle, and having multiple policies with State Farm.
J.D. Power ranks State Farm third overall for a satisfying purchase experience. This is most likely due to its 19,000 agents throughout the U.S. who provide a hands-on experience. However, you cannot purchase your policy online because all policies are sold through these agents. State Farm's financial strength is recognized by AM Best with an A++ (Superior) rating.
Best for Military Drivers: USAA
Why We Chose It: USAA auto insurance is only available to active military, veterans, and their immediate family members. It has high customer service ratings and affordable prices.
Accident forgiveness is free in some states after five years
High scores from J.D. Power for insurance shopping, claims, and customer satisfaction
No payment plan fees for paying insurance monthly
You must become a member to use its services
Not available to all consumers
Only certain family members are eligible
USAA is a full-service financial firm that's catered to the military community since 1922. To obtain an auto insurance policy with USAA, you must be a member. Membership is limited to active-duty members of the military, veterans, their spouses, and children. USAA is rated A++ (Superior) by AM Best.
According to USAA, members who sign up save an average of $707 when they switch auto insurance. Discounts are available based on your driving, your vehicle, and your membership. Unique to the military, members can receive a discount for keeping their vehicles in a garage on a military base. Additionally, members are not penalized for paying premiums monthly vs. every six months or annually.
The best auto insurance companies vary depending on the region of the country you live in. Although we picked Amica as our overall top choice, other local and nationwide companies fared better in certain areas. It pays to compare your auto insurance options with several providers to explore what coverage, benefits, discounts, and premiums are available for your vehicle based on your driving record and habits.
Frequently Asked Questions
What Auto Insurance Discounts Should I Look For?
Start with discounts based on the equipment on your vehicle, such as ABS brakes, airbags, and an alarm. Then focus on discounts for things that you can control, like being a good driver, getting good grades as a student, taking driving courses, checking perks for associations you belong to, and paying in full vs. monthly. Also, look at any discounts available when insuring multiple cars and bundling your home and auto insurance which can lead to significant discounts.
How Can I Find the Best Price on Car Insurance?
The best advice is to shop around and get quotes from multiple auto insurance companies. This is the only way to know if you're getting a good deal based on your personal circumstances. Research each insurer's available discounts and ask about which ones fit your profile. Although one company's base rates may be lower, after applying eligible discounts, a different insurer may be a better deal.
How We Chose the Best Auto Insurance Companies
To pick the best auto insurance companies, we compared policy options from numerous insurance companies for a variety of driver types. Our goal was to find the best combination of coverage, benefits, discounts, and premiums for a variety of driver profiles.