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The 5 Best Auto Insurance Companies in the US
Auto insurance is really a safety net that protects you from damaged health and financial ruin. It’s a pretty important job, and everyone should be on the lookout for the best auto insurance company to protect their family and finances.
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The factors that determine what makes the best auto insurance company are not easy to pin down into a cut-and-dry sequence. This is because different drivers have diverse car insurance needs. Some may be looking for great prices, while others may be looking for the auto insurance companies with the best communication.
Cheap vs. Best Auto Insurance Companies
There are certain factors that are important in an insurer no matter what.
Whichever factors matter to you, everyone should make sure that the car insurance company they choose is legitimate, financially stable, and a leader in customer service.
When many people think of the best car insurance provider, they immediately think of the cheapest provider of car insurance. However, this is not the best way of thinking when it comes to protecting your finances and physical well-being.
There is an old saying that claims “if you buy cheap, it will act cheap.” This adage can certainly prove true with auto insurance. Car insurance companies that offer rates well below competitors are likely cutting corners in ways that won’t benefit anyone.
Your car insurance premium payments might be really cheap, but how good of a deal will your auto insurance seem when the company denies a legitimate claim? How good will they appear to be when they drag out payments on your medical bills to the point that the bills are being sent to collections and ruining your credit? Will they seem like the best auto insurance company for your dollar when they ignore your calls even though you are injured and out of work from an accident?
The best auto insurance companies are definitely not always the cheapest. What you need to look for is the best value for your money. The best auto insurance companies don’t dodge you during the claims process or try to lowball their payouts to you and your creditors.
The best car insurance companies are committed to making you and your vehicle whole again after an accident or a loss.
Definition of the Best Insurance Company
In addition to not being misers when it comes to paying out claims, there are a lot of other factors that can define the best car insurance company. To find your best car insurance company, you need to determine the factors that matter to you. Important factors for you might be:
- Affordable rates
- Lots of discounts
- Ability to bundle services such as home or life insurance, along with auto insurance
- All business can be conducted online
- The insurance company is teen-driver friendly
- Agents are available 24 hours a day
- The company has been in business a long time
- Ability to speak with your agent face-to-face
- Reputation for excellent service
- Participation in programs like vanishing deductibles and accident forgiveness
- Policies for high-risk drivers who need insurance
- High financial ratings
- Company shows corporate responsibility by donating time and money to causes that benefit the community
Some of the above factors may matter a great deal to you, and some may not matter at all.
When you review quotes from auto insurance companies, make sure to note how different companies measure up to the factors that you find most important.
Largest Auto Insurance Companies
The biggest auto insurance companies are certainly able to provide lower premiums because they can spread their risk over many different customers. Bigger car insurance companies also usually sell car insurance in most states in the U.S. , and have websites that offer information, the ability to make changes to your policy, and the ability to pay your bills online.
According to the 2011 Market Share Data compiled by the National Association of Insurance Commissioners, the top five largest auto insurance companies cover more than 50% of the total market share in the U.S. The five largest providers of private auto insurance in 2011, with their percentage of the market share and dollar amount of direct premiums written, are:
- State Farm – 18.62% of the market and more than $31 billion in premiums written
- Allstate – 10.32% of the market and more than $17 billion in premiums
- Geico (Berkshire Hathaway) – 9.07% of the market and more than $15 billion in direct premiums
- Progressive – 7.94% of the market and more than $13 billion in premiums
- Zurich Insurance Group – 5.9% of the market and more than $9 billion in premiums written
Oldest Auto Insurance Companies
One marker that might indicate that a car insurance company is doing something right is how long the company has been in business. Auto insurance companies that have weathered economic depression
s, wars, and natural catastrophes have the staying power to make it in a very competitive industry. They have probably also identified those procedures and policies that ensure customer satisfaction the most.
It is difficult to identify the oldest car insurance companies, as the nature of the insurance industry includes buy-outs, name changes, and changing lines of business. The five oldest car insurance companies that started out offering insurance and still sell auto insurance today are:
- The Hartford. – This company started in 1810 offering property fire insurance.
- The Travelers Companies, Inc. – One of the predecessors of this company was Traveler Property Casualty Corporation, which was founded in 1864 and is credited with selling the first automobile policy.
- Amica Mutual – This company started in 1907 offering property and casualty insurance.
- Auto-Owners Insurance Company – This insurance company was started in 1916 under the same name.
- State Farm – Founded in 1922 as a provider of auto insurance.
Ratings for Car Insurance Companies
One of the most important factors about the best car insurance companies is their financial ratings. An auto insurance company is only as strong as its assets, so it is very important to know where your car insurance provider stands in terms of financial stability.
The U.S. Securities and Exchange Commission has identified certain companies as Nationally Recognized Statistical Rating Organizations or NRSROs. These companies have a reputation of accurate and balanced ratings for many different kinds of companies along many different industry lines, including the insurance industry. The oldest, Standard & Poor’s, traces its roots back to 1860.
Most car insurance companies certainly have the assets to cover your personal losses and injuries in an accident, but financial ratings take into account an insurer’s ability to last in times of economic depressions or to be able to meet the monetary demands of natural disasters that affect large regions and multiple customers. Blizzards, earthquakes, tornadoes, floods, wildfires, and hurricanes can all generate a high volume of claims that an auto insurance provider needs to be able to cover.
Most of the NRSROs maintain websites where the public can search for an auto insurer’s ratings for free or after registering an email address with the website. Most use a system of alphabetical ratings, with “A” ratings indicating the highest amount of financial stability. Many also incorporate a plus and minus system that further denotes ratings within the categories, with an “A+” rating being higher than an “A” or “A-.”
The best auto insurance companies in the U.S. have strong current ratings and a history of high ratings despite economic downturns or large catastrophes.
Those companies have proven that they have the financial assets and know-how to weather actual and metaphorical storms.
Customer Service Ratings
Another important ratings system for the best auto insurance companies in the U.S. is 
customer service ratings. It is great to know that your auto insurance provider is financially strong, but it is also important to know what past and current customers say about the company. A car insurance provider’s reputation should be as important as its financial ratings.
The first place to look for customer service ratings is the Better Business Bureau. The BBB offers company ratings based on the resolution of customer complaints, along with other factors. The BBB also uses an alphabetical ratings systems, with “A” being the best.
Another place to find customer ratings is the website for J.D. Power & Associates and its Power Circle Ratings. Every year, J.D. Power & Associates compiles data from customer surveys on a long list of topics, including car insurance companies. The company then analyzes the data and award companies a number of Power Circles out of five to indicate customer satisfaction. In the car insurance industry, surveys deal with everything from buying insurance to making claims.
From a customer service standpoint, the manner in which an insurance company handles claims is probably one of its most important aspects.
According to J.D. Power & Associates, the top five car insurance companies in terms of handling claims for 2011 are:
- Auto-Owners Insurance, with five out of five Power Circles.
- New Jersey Manufacturers Insurance Co., with five out of five Power Circles overall.
- USAA, with four out of five Power Circles.
- State Farm, with four out of five Power Circles.
- Amica Mutual and American Family, tied with four out of five Power Circles.
There certainly are ratings from J.D. Power & Associates based on other factors–such as an insurer’s insurance packages, communications skills, and pricing–that would put different companies in the top five. When researching such ratings, look at the ratings for the factors that matter to you, and find out which companies scored highly.
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