Auto insurance premiums may seem like just another bill to pay, but the company you select can dramatically impact your overall satisfaction. The fact is, some car insurance providers are known for faster, more reliable processing of claims, as well as better customer service in general.
Premiums can also vary dramatically from company to company, yet you won’t know until you check. There are other factors to consider among providers as well, including third-party rankings and average consumer complaints.
Although car insurance companies tend to be transparent when it comes to their coverage options, the sheer number of companies and factors to consider can make shopping for car insurance a difficult feat. To help solve that problem, we compared more than two dozen top car insurance providers based on the factors that matter most.
Our Review Process
To ensure objectivity and a thorough examination of each car insurance provider, we reviewed 25 different companies and assigned each one a grade within the following categories:
- Customer Satisfaction
Within each category, we assigned a rating for each company and totaled them in order to establish an overall composite rating of zero to five stars for each car insurance provider. Below you’ll find the factors we considered within each category, and how much weight was given to each one.
In order to ensure each auto insurance review we compiled used the most up-to-date, factual information possible, we collected data from a variety of official sources that report on auto insurance companies. For example, we collected consumer complaint data from the National Association of Insurance Commissioners (NAIC), which is “the U.S. standard-setting and regulatory support organization dedicated to serving the nation’s state insurance regulators.”
We also compared car insurance companies in terms of their customer service and claims processes, which are rated independently by J.D. Power and Associates. Separately, we looked at survey scores from Consumer Reports.
We scoured company websites in order to collect accurate information on car insurance policies, added features, and discounts. We also relied on third-party data from Quadrant, which we used to account for regional and state differences in premiums, differences in pricing methodology, and installment costs.
One of the first factors we compared among auto insurance providers was availability—or the likelihood any individual is eligible to purchase a car insurance policy from any given company.
This factor is important since consumers may not have access to the best car insurance policies due to factors beyond their control. By focusing mostly on car insurance providers that offer broad access around the country, we ensure our car insurance reviews are helpful to as many people as possible.
Some car insurance providers offer policies nationwide, whereas others only extend coverage in select states. For this factor, we gave preference to providers that offer broad coverage nationwide. We assigned each company a score from zero to one that reflects its availability based on the geographic regions it serves.
Other factors are harder to score but just as important. For example, car insurance offered through USAA is inarguably high quality, yet you must be a military member or have an eligible affiliation to qualify. Likewise, certain car insurance policies offered through The Hartford are only available for AARP members who are ages 50 and older.
Overall, companies that have the broadest availability were rated more favorably than others in our reviews.
While cost is not the only consideration to weigh when shopping for car insurance, the price you pay for premiums is important. Overall, consumers should strive to pay the lowest possible cost for the amount of coverage they need. Further, they should make sure they’re not paying more than they should without receiving something tangible in return.
Ultimately, we evaluated four individual aspects of pricing and scored each company on a scale of zero to one in each.
Median Annual Premiums
Using third-party data from Quadrant, we compared median annual premiums as well as regional and state differences between premiums. We calculated a score of zero to one for each company, based on how its premiums compare to the competition. To adjust for regional differences, we first scored premiums by state, and then we calculated the averages of the individual scores to derive the overall premium score.
While median annual premiums do not necessarily represent what consumers will pay for their own insurance policies, they do help us measure affordability on a standard scale. With that said, consumers should shop around and compare pricing on auto insurance policies since plenty of individual factors can leave them paying more or less for their own coverage.
Cost of Installments
Using the same set of data, we compared the cost of paying car insurance premiums in installments vs. paying for six months of premiums upfront. Ultimately, car insurance providers with bigger pay-in-full discounts scored higher in this category, and those with no surcharge for paying in installments scored highest.
This metric is important since premiums can look higher than they really are when installment charges are added. Conversely, companies that offer discounts for paying for a policy upfront may be more affordable than they first appear.
We also looked at the loss ratio of each car insurance company. A loss ratio is a measurement used to describe an insurance company’s expenses compared to its profits. It’s calculated by adding a company’s paid insurance claims to its adjustment expenses, then dividing that figure by total premiums earned, and then multiplying by 100. Generally speaking, the higher the loss ratio, the more efficient the company is at providing value to its customers per dollar of premiums collected.
For example, a company that brings in $200 in premiums and loses $100 of those funds to claims and administration would have a loss ratio of 50%.
We scored car insurance companies from zero to one based on their loss ratios, with higher loss ratios generating higher scores. We factored in loss ratios among car insurance providers on a three-year average from 2017 to 2019, using information from NAIC Market Share Reports.
We also looked at each company’s pricing methodology. This factor was examined in order to determine how much driving factors influence premiums vs. how much other factors influence premiums.
Driving factors we looked at consisted of mileage, age, and driving record; the non-driving factors we considered were homeownership, education level, marital status, gender, credit, and not-at-fault driving record. Because this factor compares driving factors with non-driving factors, it also takes car insurance discounts into account.
Overall, companies that gave more weight to driving factors were scored higher than those that calculated premiums with more weight given to non-driving factors.
Customer satisfaction is crucial to consider when shopping for car insurance. After all, you will become intimately acquainted with your provider’s processes if you are forced to file a claim, especially a complicated or expensive one.
To help consumers gauge car insurance companies based on their customer satisfaction ratings, we used third-party reporting from three separate agencies.
Consumer Reports Ratings
Consumer Reports is a nonprofit member organization that “works side by side with consumers for truth, transparency, and fairness in the marketplace.”
With that in mind, we compared car insurance companies based on their Consumer Reports ratings, which weigh customer satisfaction when it comes to premiums, claims, and service. Companies received a rating of zero to one.
J.D. Power Scores
We looked at how individual car insurance companies scored within J.D. Power’s relevant consumer satisfaction studies from 2019 to 2021. Specifically, we compared providers based on how they ranked in J.D. Power’s U.S. Auto Insurance Study, U.S. Auto Claims Satisfaction Study, and U.S. Insurance Shopping Study.
Companies that repeatedly scored higher marks in these studies were given preference in our own ratings system, which scored each company from zero to one in this category.
NAIC Complaint Scores
Finally, we compared auto insurance company consumer complaint scores compiled by the National Association of Insurance Commissioners (NAIC). Consumer complaints are important to gauge when buying car insurance since they represent the experiences of prior customers. The NAIC rates insurance companies using an average index of 1.00; companies that score lower than that have a lower-than-average number of complaints, and vice versa.
To score companies in this category on a scale from zero to one, we looked at three years of data (2018, 2019, and 2020). We looked at car insurance providers as well as their subsidiary companies, and weighted subsidiary companies based on 2020 annual premium amounts.
Not surprisingly, car insurance providers with fewer consumer complaints scored higher in this category, whereas those with more consumer complaints scored poorly.