Best Auto Insurance Companies in 2020
- AAA (The Auto Club Group)
- CSAA Insurance Group
- Auto Club of Southern California
- Erie Insurance
Rankings for the best life insurance companies were identified in partnership with Insure.com, which analyzed the 20 leading issuers of auto insurance and surveyed more than 3,700 life insurance customers. Each company was rated based on price, customer service, website and mobile app, and customer recommendation while also considering the ratings of A.M. Best. (A.M. Best financial ratings are assessments of the insurer’s ability to fulfill their financial obligations to policyholders.)
AAA (The Auto Club Group)
AAA is one of the most reputable car insurance companies that often garners rave reviews regarding their excellent and professional customer service.
As part of auto insurance policies, AAA Accident Assist is a handy benefit when you need roadside assistance and it guarantees repairs for the life of the vehicle when using an AAA-affiliated repair shop.
You must be an AAA member to be eligible for the company’s auto insurance and coverage varies by state.
CSAA Insurance Group
CSAA Insurance Group is is a part of AAA, so you’ll need AAA membership. But, you are eligible for a wide range of coverages, programs and potential discounts such as roadside assistance and discounts at AAA-partnered locations, in addition to top-tier customer service.
USAA is one of the country’s largest financial institutions and offers auto insurance policies (and other financial products and services) only to active U.S. military servicemembers, veterans and their families.
You can get discounts when your car is parked in the garage on base. You could get a waiver of your collision deductible if an accident wasn’t your fault. Policy renewals are also quite lenient even if you have claims on record.
Auto Club of Southern California
The Auto Club of Southern California is part of AAA, but operates separately, and provides auto insurance in 20 state -- not just for residents of Southern California.
The insurer is often noted for its stellar resources such as easy-to-use websites, mobile apps, local branches, car-buying guides, travel-planning tools and more.
Erie Insurance is often heralded for having knowledgeable and pleasant customer service agents.
The insurer offers pets protection, locksmith services, rental reimbursement coverage, and no-deductible windshield repairs as part of their policies. Accident forgiveness becomes available after 3 years of coverage with Erie Insurance.
Erie Insurance serves only 12 states.
The Different Types of Car Insurance
Most U.S. states require auto insurance
When you have “full coverage,” it often means that you have liability, collision, and comprehensive coverages (all further detailed below).
Liability insurance coverage is meant to pay other parties for damage caused by your vehicle.
In nearly all states, this is the bare minimum level of auto insurance required.
Bodily injury liability
This coverage will pay for medical expenses, legal fees, loss of wages and other costs associated with injuries and death in accidents where your vehicle was in motion -- whether or not you were driving it.
Property damage liability
This coverage will pay others for damage to another vehicle and property caused while your vehicle was in motion -- whether or not you were driving it.
May Be Required
Depending on your state laws, additional coverage may be required. Your auto loan provider may as require these coverages.
Medical payments or personal injury protection (PIP)
Medical payments coverage pays for medical expenses for you and your passengers (even if you’re driving someone else’s vehicle) after an accident, regardless of who is at fault.
PIP covers medical expenses, lost wages, funeral costs and other expenses for you and your passengers after an accident.
Uninsured motorist coverage
This coverage will pay for bodily injury and, in some states, property damage to you and other passengers in your vehicle from an accident where the at-fault party does not have (or does not have sufficient)
For the most part, the state-required minimum auto insurance coverages is focused on compensating other parties in accidents that result from your vehicle.
However, accidents and other types of incidents can also cause extensive damage to your car, which is where collision and comprehensive coverage can be useful.
Both types of additional coverages are not required by any U.S. state, but lenders may require them as long as you still have an outstanding loan for your vehicle. (You can remove them from your policy after paying off the loan.)
Collision coverage insures you against damage to your vehicle caused by a collision with another vehicle or object (e.g., parked vehicles, trees, and fences) when you’re the at-fault party.
This coverage applies only for damages sustained to your car while it is in motion.
Comprehensive coverage covers hazards while your vehicle is parked and not in motion.
Common examples of such damages include those caused by falling trees, vandalism, storms, fire, and more.
The best part is that your car insurance premiums won’t increase as a result of a claim because you’re typically not at fault for these incidents.
Factors that Affect Your Car Insurance Rates
Car insurance companies use a ton of data to determine your risk of accidents and likelihood of claims.
These are often the factors considered as part of their underwriting process:
If you want more coverage, you’re going to pay more for it. So, for example, full coverage is going to cost significantly more than just liability-only coverage. Remember that you may have to pay for additional coverage depending on state requirements.
Gender and age
Gender and age are used to generalize the driver and to judge their risk of getting into more accidents.
Not surprisingly, young male drivers are often considered very risky and tend to pay higher car insurance premiums.
Married couples have been found to be in fewer accidents and file fewer claims.
Additionally, married drivers are often eligible for lower premiums through multi-vehicle discounts and bundling auto insurance with other types of insurance.
Driving experience and history
Those who have been driving longer and those who have few or minor violations and accidents are seen as less-risky drivers.
Research found that people with lower credit scores are more likely to file claims and insurers may use this information to calculate premiums.
So, a higher credit score could play in your favor when it comes to calculating premiums.
That said, some states forbid insurers from using consumer credit histories when underwriting auto insurance policies:
Location not only helps to identify the required coverages for the state, but insurance companies also use your location to look at the likelihood of natural disasters, crime, frequency of accidents, and other risks associated with your area.
Auto insurers find that drivers who’ve had uninterrupted coverage are less likely to get into accidents. So, if you’ve maintained an auto insurance policy continually, you’re more likely to get lower rates.
Simply, a history of many claims -- whether with the current insurer or previous insurers -- will likely result in higher rates. This is especially the case for larger claims where you’re the at-fault party.
The insured vehicle will be considered for its purchase price, safety features, safety tests, repairs costs, and more.
Data may reveal that your vehicle model is known to be involved in accidents more often or
Purpose of vehicle
You will usually be asked what you use the car for, such as commuting to work or school. Or, you’re just driving it occasionally for recreation.
Additionally, if you plan to use the car for commercial purposes (such as ridesharing) or as part of running a business, you’d have to ensure that your vehicle is covered properly.
Your annual mileage provides the car insurance company with information on how often you drive. The more you drive, the more likely to be part of accidents -- so you can expect to pay higher rates.
Auto insurance companies may not verify this information upon application but note that mileage information is often collected by servicers when your vehicle goes in for service, oil change, inspection, etc.