Car insurance is a significant household expense. According to a recent AAA study, the average annual policy for full coverage of a medium-sized sedan is around $1,251. Expect to pay more if you drive a larger or more expensive car or SUV, or one that is prone to theft. Although it is natural to want to cut costs, your auto insurance is not necessarily the place to pinch pennies.
Buying the right coverage for your vehicle from a reputable insurance company may save you money in the long run, especially if you are involved in a crash. However, shopping for insurance can be confusing and overwhelming. To help you, Money Magazine and ConsumersAdvocate.org ranked the best car insurance companies for 2020.
Types of Car Insurance Coverage
Coverage for Personal Liability and Property Damage
Every driver must carry their state’s minimum liability and property damage coverage. It is the “bare bones” of insurance coverage, and without it you cannot drive legally. You risk losing your license and fines if you get pulled over for driving without car insurance. Personal liability and property damage exist to protect other drivers from damage you may cause in an accident. Personal liability, also called bodily injury coverage, is usually written as a fraction, such as $20,000/$40,000; the first number is the maximum dollar amount to be paid out per person, and the second number is the maximum to be paid out per accident.
Collision coverage either covers the repairs for your damaged vehicle or refunds you the cash value of your car if it is totaled in a collision. That can be a crash with another car or a run-in with something other than a vehicle, such as a mailbox, tree, pothole, or fire hydrant. In most states, this applies only to collisions where you are at-fault or do not know who the at-fault party is. Your deductible is subtracted from the total payout. Although collision coverage is not required in many states, if you take out a loan to buy your car, your lender probably requires it.
Comprehensive coverage pays for damage occurring from anything other than a collision, including:
- Damage caused by animals
- Storm damage
Comprehensive coverage can be added without collision, but the reverse is generally not true. It is a good option to protect vehicles you may be storing but will not be driving for a while; for example, a car you are saving for a teen in your family who does not yet have a driver’s license.
When creating your plan, you must purchase the minimum coverage mandated in your state. Some states also require personal injury protection (PIP) for yourself and coverage in case you are involved in an accident with an uninsured motorist. From there, speak with an agent to determine if it makes sense to add other products, such as collision or comprehensive. A skilled agent will tailor coverage based on your needs, driving history, and lifestyle.
Money Magazine’s Best Auto Insurance Options for 2020
In evaluating various car insurance offerings for the year, editors from Money Magazine and ConsumersAdvocate.org partnered together, logging more than 200 hours of research. They evaluated three major qualities of each company:
- Coverage options and discounts
- Customer service
- Financial strength
These are the best options based on their findings:
Allstate – Best for Local Customer Service
Allstate offers a variety of insurance types and has agents in all 50 states, which is great for consumers who want more personal service. Their “Drivewise” program gives an initial 10 percent discount for using the app, and an additional 25 percent discount for every six months of safe driving.
Esurance – Leader for Online Presence
If you prefer to do your banking and other business online, you will find Esurance especially convenient. Now part of Allstate insurance, Esurance offers the ease of online use with the financial security of an industry leader with Allstate. Esurance also rewards safe drivers through their “DriveSense” program.
GEICO – Offers Some of the Lowest Auto Rates on the Market
The second-largest auto insurer on the market, GEICO has some of the most inexpensive policies available. They also have excellent customer satisfaction with a National Association of Insurance Commissioners customer compliant score that is much lower than the national average.
Progressive – Best for Discounts and Coverage Options
Progressive’s plans are highly customizable, so you only pay for what you need. They have their well-known “Name Your Price Tool” that allows consumers to select a plan that meets their budget. Like many other companies, Progressive offers savings for a good driving record. Progressive also has a high customer service rating and a low complaint ratio.
State Farm – Best for Discounts
The largest auto insurance provider in the country, State Farm, operates in all 50 states. They offer a variety of different discounts depending on the customer, including discounts for returning customers, safe drivers, and those who bundle auto insurance with another insurance products available at State Farm.
Honorable Mention – Liberty Mutual
Liberty Mutual is the sixth largest car insurance provider in the country and offers several options tailored to customers with unique needs. For example, their policy specially designed for teachers covers losses related to the job, such as vandalism on school property and property loss for teaching supplies.
Consider Adding These Car Insurance Extras to Your Policy
Most auto insurance companies offer a variety of additional coverage options to add value to your policy and give you peace of mind should your vehicle break down or be involved in an accident:
- Accident forgiveness: This feature keeps your premium from going up after a single at-fault car accident.
- Gap insurance: All new vehicles depreciate over time. This insurance covers the gap between how much the insurance company says yours is worth at the time of an accident and how much you still owe on it.
- Minor violation forgiveness: This is an assurance that if you have a single minor traffic violation, your rates will not increase.
- Rental insurance: This is liability, collision, or comprehensive coverage built-in to your regular car insurance that extends to rental cars.
- Roadside assistance: This is 24/7 assistance should you get a flat, have a dead battery, or run out of gas. Roadside assistance does not generally help with damage caused by accidents.
It is worthwhile to find out if your insurance company offers these added services. The terms for each will vary by company. Paying more for them up front can end up saving you if you get pulled over or have a fender bender.
Factors That Determine the Price of Your Car Insurance
Your car insurance rates are calculated based on many different factors. Some of these you can control; others you cannot. Knowing what impacts your rate can help you make informed decisions when choosing a new policy.
The following factors may affect your car insurance rates:
- Age and gender: Typically, younger males have higher accident rates than other groups, which means higher premiums.
- Marital status: Statistically, married people have fewer car accidents than single people.
- Credit score: Some insurance companies consider your credit score when determining your rates. A lower score means higher premiums.
- Location: Urban areas are at greater risk of theft, damage, accidents, and collisions involving uninsured drivers.
- Vehicle safety rating: Vehicles proven to better protect occupants in a crash may give you a lower insurance rate.
- Driving habits: If you commute a significant distance for work every day, you are more likely to have an accident simply because you are on the road more.
- Driving history: Previous accidents and tickets also affect your rates and, in some cases, may even discourage a company from covering you.
Choosing car insurance is an important decision. Not all plans are alike. A bit of time and research when choosing a car insurance company can help ensure you have all the protection you need should you have an accident, driving violation, theft, or vehicle damage.
Freehold Car Accident Lawyers at Ellis Law Help Clients Recover Compensation After a Collision
Auto insurance is an essential means of financial protection should you be involved in a car accident. However, it may not be enough to cover all the losses you might incur. Our Freehold car accident lawyers at Ellis Law represent clients living with pain, suffering, lost income, and property damage after a serious crash. Call us at 732-308-0200 or contact us online to schedule a free consultation. Centrally located in Freehold, New Jersey, we serve clients throughout East Brunswick, Toms River, Middletown, Jersey City, Neptune, Hudson County, Union County, Essex County, and Ocean County, as well as Brooklyn and New York, New York.