What Is the Best Car Insurance? Guide to Selecting the Best Fit

Troubled with the rising car and traffic incidents and wish to provide a safety net for your car? No need to frantically surf the web to get an accurate idea. This article is your complete guide to understanding what is the best car insurance.

Calculating insurance is a tricky business and contemplating if it is worth it and how much you have to pay is another matter entirely. Once you cross a certain age, peer pressure and societal norms push you to learn several skill sets including driving.

From flaunting a new style vibe to wanting independence, the first step young adults take is learning to drive. Once you have earned a driver’s license process, the excitement skyrockets.

Now that the exhilarating process of the license is complete, next comes the car insurance phase. If you’re a teenager who recently got your consent or a parent of a soon-to-be licensed driver or you just bought your new car, the article will guide you on what is the best car insurance.

In general, humans feel guilty after spending money. But paying insurance is not an expenditure; rather, it is guaranteeing a safety net for yourself. But can everyone afford this luxury? While teenagers are always short on cash, many people are also struggling to make ends meet or save money.

However, purchasing car insurance is inevitable, and needless to say, ensuring the best car insurance can be a tedious process and simply heavy on the pocket,

The rash drivers lack experience, and insurance companies consider their immaturity a risk and higher prices. The sense of freedom is heavy on the wallet. However, it is essential to consider car insurance options to stay financially protected while on the road.

Answering the burgeoning list of questions and concerns, the following article will cover all the aspects of the best insurance for teenagers, adults, and in general everyone. There will be a lot of legal and financial terms you would want to know before stepping into the jargon of car insurance, so follow this detailed guide to figure out what is the best car insurance available in the market.

What is car insurance?

What is car insurance? It is defined as financial protection if you cause an accident with your car. Moreover, it works as a safety net if your vehicle is damaged or stolen. Before we indulge in details about car insurance, it is essential to know that having car insurance is required by law in most states.

The car insurance pays a certain amount of coverage, and as long as your policy is active, your insurance will kick in if needed. It also helps pay your legal fees if you have been taken to court over any unpleasant accident.

Furthermore, it provides collision coverage and comprehensive coverage by helping pay for repairs or replacement if your car is stolen or damaged. That’s not all. Car insurance also helps protect the passengers by paying medical payments coverage, and personal injury protection may help pay for your medical bills if you’re injured in an accident.

What are the 10 best insurance companies?

After we thoroughly researched the auto insurance market, 10 companies stood out among the competition as the best car insurance providers. When ranking these insurers, our team considered state availability, breadth of coverage, pricing, and satisfaction scores from experts like J.D. Power.

We also took into account AM Best’s financial strength ratings and complaint volume as reported by the National Association of Insurance Commissioners (NAIC). Each insurer was graded on a 10-point scale. We’ll take a closer look at our top five picks for the best auto insurance companies below.

  1. Car insurance shoppers often put the most importance on price. Here are average annual and monthly costs for good drivers.
  2. Company Name: USAA, Average annual car insurance cost: $1,141, Average monthly car insurance cost:$95
  3. Company Name: Geico, Average annual car insurance cost: $1,182, Average monthly car insurance cost:  $99
  4. Company Name: State Farm, Average annual car insurance cost: $1,402, Average monthly car insurance cost: $117
  5. Company Name: Erie, Average annual car insurance cost: $1,419, Average monthly car insurance cost:   $118
  6. Company Name: Travelers, Average annual car insurance cost: $1,435, Average monthly car insurance cost: $120
  7. Company Name: Auto-Owners, Average annual car insurance cost: $1,532, Average monthly car insurance cost: $128
  8. Company Name: Nationwide, Average annual car insurance cost: $1,540, Average monthly car insurance cost   $128
  9. Company Name: Progressive, Average annual car insurance cost:$1,892, Average monthly car insurance cost: $158
  10. Company Name: Allstate, Average annual car insurance cost:$2,022, Average monthly car insurance cost: $169
  11. Company Name: Farmers, Average annual car insurance cost:$2,124, , Average monthly car insurance cost: $177

Best car insurance for young drivers

The research phase has been completed as you have weighed a plethora of pros and cons to evaluate the car insurance and how you will be managing the additional expenses. The next step is fishing out the best type of car insurance that is best suited to your needs and encloses a teenager’s financial estimate.

With the addition of your teenage child, the type of protection you need while driving or on the road will change drastically. While wondering what is the best car insurance, one should be careful to include the cost of the additional coverages that one might be required to buy. Some of the most common car insurance requirements include:

Bodily injury liability (BI) – The Body Injury liability coverage protects the driver from paying for the other party’s injuries out-of-pocket in an accident you cause.

Property damage liability (PD) –  Property Damage Liability protects you from having to pay for another party’s damages to their vehicle due to an accident that might have occurred.

Medical payments (MedPay) – MedPay is one of the most commonly used coverages that help in paying the medical bills after a covered accident, regardless of who was at fault. (in this case; the drivers)

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Personal injury protection (PIP) – Personal injury protection is the type of coverage that helps to pay for medical bills, lost wages, and death benefits in a no-fault state.

Uninsured/underinsured motorist (UM/UIM) – The following type of protection aids in payment of property damages or injuries to your own person in the event that the at-fault driver has insufficient limits to cover you.

Cheapest car insurance

The cheapest car insurance is not always easy to find. But remember the golden word whenever you are stuck in a hoard of financial trouble – where there is a will, there is a way.

So, by the comparison of various quotes, the young teenager or their parents can easily opt for the cheapest option available and can also avail of the luxury to use discounts. This will ensure that the coverage is done at an affordable price.

The car insurance rates vary from state to state. But teenage drivers tend to pay the highest rates. 16 to 19 years drivers pay more than drivers in any other age range. This payment level is due to the minimum driving experience. The lack of experience makes younger drivers more at risk of accident involvement.

Next up, let’s glimpse the cheapest insurance provider, Namely, the most affordable options are Geico, Allstate, Progressive, and State Farm. Tip for potential policyholders – car insurance for a teen driver has sky-high prices so an easier alternative is for parents seeking cheaper rates.

Buying coverage under an existing policy with your parents is the best way to get affordable insurance. Alternatively, you can obtain insurance quotes from multiple providers to save money.

Furthermore, the insurance laws vary from state to state, many states do not require drivers to have full coverage. However, if you drive a new car with a loan or a lease, you may be required to carry full coverage based on your buyer agreement. The minimum level of coverage will usually cover the damages to another driver’s vehicle.

Depending on where you live, you may have to follow certain laws as a new driver. Some states restrict drivers to the locations or times in which they can drive. New drivers must follow these laws until they are 18 or have their Graduated Drivers License.

The cheapest car insurance tends to be with the following insurance providers. Note the premium amounts per provider.

  1. American National: $1193 six-month premium or $199 per month.
  2. Erie: $1402 six-month premium or $234 per month.
  3. Auto-Owners: $2139 six-month premium or $357 per month.
  4. USAA: $2401 six-month premium or $400 per month.
  5. American Family: $2528 six-month premium or $421 per month.
  6. ALFA: $2580 six-month premium or $430 per month.
  7. Nationwide: $2702 six-month premium or $450 per month.

Car insurance quotes

Shopping and selection of car insurance quotes can get as hectic as spotting a needle in a haystack. So, one must be prepared for a plethora of options that will be chucked your way when choosing the best car insurance.

The best car insurance is directly dependent on what company to use and what coverage to get. Hence, comparing quotes from different car insurance firms is one of the best ways to save money.

The comparison of car insurance quotes might seem hectic to the outlook, but surprisingly the process is quite simple. Minimal time investment is required to find the best car insurance rates and the perfect policy that fits your criteria and budget.

Getting free car insurance quotes

Car insurance is expensive but getting insurance quotes is always free and ensures that you get the best answer.

Online – Digital world has really advanced and done wonders. Kicking out the mundane way of research, now we are a click away from googling in the comfort of our home and finding the desired information.

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Multiple car insurance companies have an online presence and they provide free quote services online. In case you wish to buy car insurance and want to compare the quotes, internet surfing will save you time as it will provide quotes from multiple companies.

By phone or in-person – If you are not satisfied with the online experience and want an authentic confirmation, then your second best guess is calling on the insurers or visiting the insurers thus getting the required information. Speak with or visit a local insurance agent who can help you find affordable car insurance options and get you a car insurance quote.

Types of insurance agents

Next up, we will be discussing the two types of insurance agents that are generally used in the context of evaluation of car insurance.

  1. A captive insurance agent works for one insurance company and can give you a quote only from that insurer.
  2. An independent insurance agent can sell policies from multiple insurance companies and can get you quotes from different insurers.

There are benefits to both approaches, and there’s no law against contacting multiple insurance agents. Furthermore, getting online quotes is hassle-free and so is speaking with an agent on insurers companies’ representatives. Hence, the following homework will only help you identify the coverage needs and tailor the policy to the best fit. Comparing auto insurance quotes is all about gathering options so you can find the best car insurance companies. To make the process go as smoothly as possible, it helps to have the following information on hand:

Driver’s license – If there are any other drivers in your household, you’ll need their driver’s license information as well.

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Vehicle identification number – You can typically find your VIN on the vehicle’s driver’s side dashboard or printed on a sticker in the driver’s side door or door jamb. If you haven’t purchased the vehicle yet but know what you’re going to buy, ask the seller for the VIN. If you haven’t picked out your car yet, you can usually get a quote with a vehicle make and model.

Mileage – If you own the car, have the odometer reading handy.

Desired coverage – You’ll want to know what coverage types you want to buy and how much coverage you need –  If you’re not sure, it’s a good idea to speak with an insurance agent who can help answer your questions.

Needless to say, the auto insurance company will gather additional information about you, such as your driving history, past auto insurance claims and (in most states) your credit. Not all car insurance prices their policies the same. Hence, it is significant to compare car insurance quotes from multiple companies.

Best car insurance reviews

The best car insurance companies give their customers more than just the coverage they want at a reasonable price. They also provide a customer-first experience from quote to claim, including a headache-free way to manage policies and make payments.

Factors impacting the cost of car insurance

The car insurance cost will vary depending on several factors that typically include:

  • Your driving record
  • Your age and years of driving experience
  • Where you live
  • Car insurance coverage selections
  • Deductible amount (if you buy collision and comprehensive coverage)
  • Vehicle model
  • The car insurance history
  • The credit-based insurance score

Why do people buy new car insurance?

Shopping around for car insurance can result in savings, but many car owners renew their policies each year without checking prices from other insurance companies.

According to the March survey, 2,000 drivers were asked what would motivate them to shop for a new car insurance policy. Below, we jot down the most common

More than half said any of these three reasons would get them to shop around:

  • A bad experience with a car insurance claim (55%)
  • Looking for a better price (54%)
  • The current company doesn’t have the coverage types I want (52%)

Older drivers (ages 58 to 76) chose price as the No. 1 reason to shop around, while bad claims experiences and coverage types were tops for younger drivers (ages 18 to 25).

Geico Car Insurance

Geico sells insurance for cars, motorcycles and classic cars. Optional coverage types for auto insurance include emergency road service, rental and mechanical breakdown insurance. Geico offers accident forgiveness insurance, which you can pay to add to your policy or earn by maintaining a clean driving record. It also sells Mexico auto insurance if you plan to drive south of the border.

Availability of Geico car insurance discounts is also quite easy, especially for good drivers. Here are some of the insurance discounts for the ease of the customers.

  1. Vehicle equipment discounts –  If your car has the latest safety features such as side airbags, you could save up to 40% off the medical payments.
  2. Discounts for driving history – If you have a good driving record. you can receive up to 26% off most coverages.
  3. Driving course discounts – If you complete a defensive driving course, you can save on your premium.
  4. Drivers education discount – If you have a young driver on your policy who completes a driver’s education course, you may be eligible for discounts on most of your coverage types.
  5. Good student discount: For drivers who are between ages 16 and 24 and enrolled in school full-time, you might be able to receive a discount if they get a B average or better.
  6. Military discount – One might be eligible for a discount of up to 15% if they are on active duty, retired from the military, or a member of the National Guard or Reserves.
  7. Multi-vehicle discount – The policyholder can save when they insure two or more vehicles with Geico.
  8. Multi-policy discount – You can save when you bundle your auto insurance with other types of insurance you buy through Geico, such as homeowners, condos etc.

Why are teen car insurance rates higher?

The insurance company has a standard protocol and working mechanism that calculates its rates based on future risks. Assume that we are computing the premium amount. Then one has to consider the insured’s driving experience. Evaluating the background to deduce results is essential. Hence, information like location, where they drive, how far they drive to work or school, the type of vehicle, and their claim history must be recorded.

According to the National Highway Traffic Safety Administration (NHTSA), in 2016, one out of five teen drivers involved in a fatal crash had alcohol in their system. The following stats put the 16-year-old at a disadvantage because their recklessness and limited experience combined put them at a higher risk. The NHTSA also indicates that 1830 drivers between the ages of 15 and 20 died in motor vehicle accidents in 2017, an alarmingly high rate.

Moreover, motor vehicle crashes are still one of the leading causes of death for people between the ages of 15 and 20, according to the National Center for Health Statistics, The factors that contribute to the increase in fatal accidents according to the Centers for Disease Control include:

  1. A low percentage of teens wear their seat belts.
  2. Teens are more likely to speed.
  3. Teens are more likely to allow shorter headways.
  4. Teens are more likely to drive late at night and on weekend nights

Why is car insurance so necessary?

It works as a safety net to safeguard the car driver even in cases when the policyholder might be at fault. Hence, the process of filing an insurance claim can lead to a significant increase in rates. Nevertheless, it is always good to consider how a claim will impact your rates.

Some insurance firms increase the annual rate by a whopping amount of $670 per year if you are at fault for an accident. The insurance process is rigorous and complex, and it can be helpful to calculate the cost. So by adding the price, including the repairing of the vehicle, it will have the average increase of filing a claim to your insurance rates.

Comparing car insurance with respect to age

For a better understanding of how much is insurance for a 16-year-old, there are a few things to consider, apart from factors like determining rates for various drivers, age, gender, location, and the type of car matter. Insuring a 16-year-old driver can be very expensive. For the analysis, the 16-year-old driver pays more than double the average cost to insure a 25-year old driver.

Conclusion

The bottom line of the debate is that the price of your car insurance will depend on where you live and whether you get your policy or have your name added to a parent’s policy. So while the insurance, no matter their gender, is relatively expensive and costly, it is advisable to select the best fit for you.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.

Insurance Noon is the world's leading source of insurance related content on the web, focusing on industry news, buying guides, reviews, and much more.