Best Auto Insurance Companies and Ones To Avoid

Looking for the best auto insurance companies? A huge percentage of people never shop for their car insurance needs — and that’s a bad idea.

The reality is that modern American business punishes you when you stay loyal to a company, rather than rewarding you.

Best Car Insurance Companies: Which to Shop and Which to Skip!

You’ve seen the car insurance ads on TV promising accident forgiveness, vanishing deductibles and other selling points.

But those features are just a side-show to the main act, which is a company’s reputation with both customer complaints and customer satisfaction after a claim is made.

If you’re looking for the best auto insurance coverage, here’s which car insurance company to check out and who to avoid:

Best and Worst Auto Insurers: Table of Contents

• Clark’s Top 3 Picks for Car Insurance
• Consumer Reports: 10 Top-Rated Auto Insurers
• Consumer Reports: 10 Lowest-Rated Auto Insurers
• J.D. Power: Best Auto Insurers by Region
• J.D. Power: Best Auto Insurers on the National Level
• Clark’s Advice When Shopping for a New Auto Insurance Policy

Clark’s Top 3 Picks for Car Insurance

Money expert Clark Howard has long sung the praises of two auto insurance companies in particular — USAA and Amica Mutual — for customers across the country.

However, if you live in Pennsylvania or New Jersey, he also likes NJM Insurance Company (NJM) because of its proven track record.

“Historically, these companies offer the best claims experience,” Clark says. “The whole thing about insurance is not necessarily to have the lowest premiums, but to have the coverage you need if something goes wrong — and these companies all excel in that respect.”

1. USAA

Technically, USAA had the highest score in every single region of the country, according to J.D. Power’s latest study on auto insurance. But USAA didn’t make it into the official rankings because it didn’t meet the study’s criteria.

And that goes to the very heart of the downside with USAA. You have to be a veteran, currently serving in the U.S. military or affiliated with the military through direct family ties to be eligible for services USAA offers.

So while it offers great car insurance coverage, that may eliminate USAA from consideration for a lot of people. You can read more about USAA eligibility here.

2. Amica Mutual

Unlike USAA, Amica Mutual has no artificial barriers to entry. But because Amica Mutual is a mutual company, insurance rates tend to be very expensive during your first year as a customer.

When you join a mutual car insurance company like Amica, there are no shareholders as there are with other public companies. You become a part owner of the company when you sign up for insurance.

So that first year, with the higher upfront costs, you’re basically buying into the company. After that, customers typically get an annual premium rebate equal to about 20% of what they paid that year, subject to how the company is doing financially.

3. NJM Insurance

As a mutual company, New Jersey Manufacturers Insurance Company (NJM) became the first company to earn the J.D. Power Personal Auto Claims Certification, a feat it has repeated for four years running.

Because NJM is a mutual company, policyholders get an annual dividend each year. For example, auto insurance customers received a regular dividend of 5%, applied as a credit upon renewal, and a special dividend of 5% sent as a check during a recent year.

NJM expanded its service to Pennsylvania in 2018 and Ohio in 2021.

Consumer Reports: 10 Top-Rated Auto Insurers

One of the annual studies that Clark watches closely to get a read on the best auto insurance companies is the Consumer Reports rating of auto insurers.

The most recent survey, conducted between 2016 and 2020, asked more than 56,000 readers about their satisfaction with the claims process, the cost of premiums and the overall customer experience with a number of insurers. After all, customer service, insurance rates and claims satisfaction can make a great difference for an auto insurance company.

Here are the magazine’s rankings:

(#1 is best)

1. USAA Group
2. NJM Insurance Group
3. Amica Mutual Group
4. West Bend Mutual Insurance Company
5. Erie Insurance Group
6. PEMCO Mutual Insurance Company
7. California Casualty Group
8. Acuity
9. Wawanesa General Insurance Company
10. Shelter Insurance Companies

Consumer Reports: 10 Lowest-Rated Auto Insurers

(#1 is worst)

1. Liberty Mutual Insurance Companies
2. Kemper PC Companies
3. Esurance Property and Casualty Insurance Company
4. Nationwide Group
5. MetLife Auto & Home Group
6. Horace Mann Insurance Group
7. Allstate Insurance Group
8. National General Companies
9. Farmers Insurance Group
10. MAPFRE North America Group

J.D. Power: Best Auto Insurers by Region

Like Consumer Reports, J.D. Power publishes another respected tally of customer satisfaction in an effort to determine which company offers the best car insurance.

J.D. Power’s 2021 U.S. Auto Insurance Study surveyed more than 38,000 customers across the country.

This annual study examines customer satisfaction in five factors (in alphabetical order):

• Billing process and policy information
• Claims
• Interaction
• Policy offerings
• Price

The reality is while you have national players advertising on TV — we’re talking about GEICO, Progressive, Allstate, State Farm and others — so much of the auto insurance industry is local.

In fact, many of those smaller regional insurers are among the best auto insurers in the business, according to J.D. Power.

Here are its top insurers by region. We’ve listed only those that scored higher than the average in their respective regions. So you’ll see a different number of entries depending on which part of the country the companies operate.

Region	Top Insurers
California	– Wawanesa – CONNECT by American Family – Auto Club of Southern California Insurance Group – GEICO – Progressive – State Farm – Mercury
Central	– Shelter – Farmers – State Farm – Auto-Owners Insurance – GEICO
Florida	– State Farm – Allstate – Auto-Owners Insurance – The Hartford
Mid-Atlantic	– NJM Insurance Co. – Erie Insurance – State Farm
New England	– Amica Mutual – State Farm – GEICO – Progressive
New York	– State Farm – Travelers – MetLife
North Central	– Erie Insurance – State Farm – COUNTRY Financial – MetLife – American Family – Auto-Owners Insurance – Progressive
Northwest	– State Farm – PEMCO Insurance
Southeast	– Farm Bureau Insurance – Tennessee – Erie Insurance – Kentucky Farm Bureau – State Farm – Auto-Owners Insurance
Southwest	– American Family – State Farm – Liberty Mutual – Progressive
Texas	– Texas Farm Bureau – Liberty Mutual – Progressive

J.D. Power: Best and Worst Auto Insurers on the National Level

In addition to its regional rankings, J.D. Power also publishes an annual shopping satisfaction study. It looks at the national picture when it comes to the most satisfying purchase experience.

The organization surveyed more than 12,900 auto insurance customers who requested a quote between March 2020 and January 2021. Here are the rankings:

J.D. Power: 10 Top-Rated Large and Mid-Size Auto Insurers

(#1 is best)

1. American Family
2. Amica Mutual
3. Erie Insurance
4. Auto-Owners Insurance
5. Liberty Mutual
6. State Farm
7. Allstate
8. GEICO
9. Farmers
10. The Hartford

J.D. Power: 10 Lowest-Rated Large and Mid-Size Auto Insurers

(#1 is worst)

1. National General
2. Mercury
3. Automobile Club Group
4. MetLife
5. Nationwide
6. Auto Club of Southern California Insurance Group
7. Progressive
8. Travelers
9. Safeco
10. CSAA Insurance Group

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Clark’s Advice When Shopping for a New Auto Insurance Policy

Clark says that shopping for your insurance every three years is a great way to save money or find a better car insurance rate. Here’s how to start the process:

Get Your Quotes

Once you have a list of candidates culled from the ratings above, you’ll want to start getting quotes.

This typically takes around 15 minutes on the phone or online for each insurer. Have your most recent policy in front of you in case any questions come up about the make and model of your vehicle(s) and your current coverage.

Working with an insurance broker is another option. You can get multiple quotes, and you’ll have access to all the insurers the broker does business with. It’s an easy one-stop shop that still gives you the flexibility of comparison pricing.

Compare Quotes

Once you get the quotes, it’s time to compare them. Each quote should be based on the same amount of coverage so you can do an apples-to-apples comparison.

One word of advice: If you own a home, have money in savings, etc., you definitely want more than the state minimums for liability. Why? Because that one time you hit a car in your blind spot (or whatever the case may be), you can have serious exposure for liability.

If you have no substantial assets and you rent a home rather than owning one, then the state minimum level of coverage is acceptable.

If you’re really price-sensitive and find that all the top-tier insurers are too expensive for your budget, you still have a couple of options:

1. Raise your deductible.
2. Consider dropping comprehensive and collision coverage on older vehicles

It’s often good to take as high a deductible as you’re allowed (usually $1,000) if you have a loan on your car.

Having a higher deductible will usually stop you from making small claims. That’s good because those claims can drive your rate up!

Meanwhile, when the cost of comp and collision exceeds 10% of your vehicle’s value, that’s the time to dump it and carry only liability coverage. You can determine your vehicle’s value at Edmunds.com, KBB.com or NADA.com.

Don’t Forget to Ask About Discounts!

There are car insurance discounts available for a lot of different things. Here are some you can ask about:

• Anti-theft devices
• Multiple policies with the same company
• College students living away from home
• Defensive driving courses
• Drivers ed courses
• Low annual mileage
• Long-time customer
• More than one car
• No accidents in three years
• No moving violations in three years
• Student drivers with good grades

Just like how there are car insurance discounts to reward certain drivers, there are ways to spike your auto insurance rates as well. Being a high risk driver, for example, can leave you paying more for insurance.

Final Thought

The decision on buying auto insurance comes down to more than just price. You’ve also got to consider customer satisfaction and complaints and a company’s reputation for making its customers whole — which is the point of insurance in the first place.

At the end of the day, hearing about a positive or negative customer service experience can help your decision in choosing an insurance provider. So, it might help to shop around and research each auto insurance company.

“Sometimes you’re better off paying a little more to be with a quality insurer who will be there when the chips are down,” Clark says.