How to compare auto insurance

How to compare auto insurance

The J.D. Power 2021 U.S. Auto Insurance Study polled 38,938 auto insurance customers and found that satisfaction with their car insurance provider remains the same in 2021 as it was in 2020, despite many insurers offering refunds and drivers spending less time behind the wheel.

Now in its 22nd year, the U.S. Auto Insurance Study analyzes customer satisfaction in five areas: billing process and policy information; claims; interaction; policy offerings; and price.

On a 1,000-point scale, overall customer satisfaction remained at 835 for 2021, marking the first time since 2017 that auto insurance customer satisfaction has not improved from one year to the next. One of the biggest holdbacks is in the area of communication where satisfaction dipped 12 points year-over-year.

“What we’re seeing in this year’s study is a case of insurers delivering with their actions but missing the mark on effective communication to their customers,” said Robert Lajdziak, senior consultant for insurance intelligence at J.D. Power.

Based on the scores, J.D. Power has named the top auto insurance provider in 11 geographic regions of the U.S. All the winners have a score far higher than the national average.

Wawansea, State Farm, and American Family have taken top honors in California, New York, and the Southwest, respectively, for the second consecutive year. The Southeast’s Farm Bureau Insurance – Tennessee and Texas’s Texas Farm Bureau are tops in their regions for the 10th straight year. Amica Mutual wins in the New England region for the ninth year in a row.

According to J.D. Power’s survey results, the following are the top-rated auto insurance companies in the U.S. by region:

  • California: Wawanesa
  • Central: Shelter
  • Florida: State Farm
  • Mid-Atlantic: NJM Insurance Co.
  • New England: Amica Mutual
  • New York: State Farm
  • North Central: Erie Insurance
  • Northwest: State Farm
  • Southeast: Farm Bureau Insurance – Tennessee
  • Southwest: American Family
  • Texas: Texas Farm Bureau

In order to stay ahead, insurance companies may need to change their offerings. Of those surveyed, 34 percent of respondents would be willing to try usage-based insurance. Currently, 16 percent of customers are using the tech, double the volume of five years ago.

Increased premiums may also drive customers to find a new insurer. Forty-five percent of respondents said that they would switch to save $300 or less. Fifty-seven percent recently switched to save that amount.

Find the car insurance coverage that protects your finances.

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Why do I need car insurance?

Car insurance is legally required to drive in most states. If you finance or lease your vehicle, your finance company may need you to maintain car insurance. Your insurance policy protects your interests in case of an accident or damage to other people or property.

How much car insurance do I need?

The right car insurance policy for you may not be the same one other people choose, even when insuring the same make and model vehicle. While personalizing your car insurance policy, consider your need to manage both legal and financial risks. State law requires you to prove you have a certain amount of insurance coverage to be a legal driver. The amount and types of mandatory car insurance vary from state to state. Only two states will let you legally drive without car insurance. While you need to meet your state’s legal requirements, you buy car insurance because it is a smart financial decision. You spend a little money each month to protect yourself from a vast unaffordable expense future expense. Accidents happen. Car insurance covers your vehicle against damage or pays for damages you cause. It also saves you from substantial medical costs you, your passengers, and anyone in a car you hit may suffer.

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Car insurance coverages

It will be up to you to decide how much coverage to obtain. The lower the coverage, the greater your personal exposure. Even if you have no assets, the debt doesn’t go away for damages that your car insurance doesn’t cover. If you have assets, they are at risk for any damages you are responsible for paying that aren’t covered by your car insurance.

What is Liability Insurance?

Liability insurance protects you from financial losses in the event of an accident that is determined to be your fault. Most states require you to have liability insurance to register a vehicle or be issued a driver’s license. Liability coverage is typically displayed with three numbers, such as 100/300/100. In this example, the insurance policy would cover a max of $100,000 in bodily injury per person, a max of $300,000 in bodily injury per accident, and a max of $100,000 for property damages. Bodily Injury – Typically, your car insurance’s bodily injury coverage will cover medical bills to treat injury or sickness, and any loss of income resulting from the injury, funeral costs, pain, and suffering. Property Damage – Property damage covers the damages you have done to another person’s vehicle or property in the accident. This can include any vehicle repairs and any damages to a home, fence, garage, etc. Crash on the freeway into a guardrail, in California, and the state will bill you for the damages.

What is Collision Insurance?

Collision coverage pays for repair and replacement costs for your car when your car is involved in a collision with another vehicle or object. The coverage kicks in after you exceed your deductible. For example, if you have a $500 deductible and the repair cost was $1,700, you will pay $500 out of pocket, and the insurance will pay $1,200. Deductibles for collision coverage commonly range from $0 to $1,000. Choosing a higher deductible lowers your auto insurance costs. It requires you to pay more out of pocket before your insurance coverage starts paying.

What is Comprehensive Insurance?

Comprehensive coverage addresses damages to your vehicle that are not the result of a collision with another vehicle. Comprehensive car insurance helps pay for damages from theft, vandalism, falling objects, fire, storms, floods, earthquakes, and a collision with an animal. Comprehensive car insurance also comes with a deductible amount you select, ranging from $0 to $1,000.

What is Gap Insurance?

Gap insurance pays the company that finances your car the difference between your vehicle’s present value and the amount you owe on the vehicle. Without gap insurance, if you total your vehicle and owe more on it than it is worth, you would be responsible for the difference between the loan balance and your vehicle’s value. Some car loans and leases require gap insurance.

Some other common auto insurance coverages include:

Medical Payments – Car insurance that covers medical payments is optional. It covers expenses for you and your passengers resulting from a car accident. It also covers you as a passenger in another person ‘s vehicle or if you are hit by a car when on foot. Common coverage levels are $1,000, $5,000, $10,000, $25,000, $50,000, and $100,000. Personal Injury Protection (PIP) – Personal injury protection covers medical expenses but is broader than medical payment insurance. PIP includes coverage for funeral costs, pain and suffering, and lost wages for you or your passengers regardless of fault. In some states, PIP is required. Uninsured Motorist Coverage – Uninsured motorist coverage covers you in the event you are hit by an uninsured driver or are the victim of a hit and run driver. Uninsured motorist insurance pays car repair bills, medical bills, lost wages, and pain and suffering up to your policy coverage limit. Some states require uninsured insurance coverage. Underinsured Motorist Coverage – Underinsured motorist coverage covers you in the event the other driver’s coverage isn’t enough to pay for the damages done to your car, property, or you. Uninsured motorist insurance makes up for the difference between what the other party’s insurance pays out and your total costs, up to your policy’s dollar limit for coverage. Some states and cities have a very high percentage of uninsured drivers. Per a 2015 study, over 25% of drivers in Florida were uninsured.

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Get tips and expert advice on how to compare car insurance quotes.

Comparing car insurance quotes can be head-spinning: Different coverage types, mysterious acronyms, and all those numbers! (Your math teacher warned you that there’d be numbers in real life.)

Not to worry. It’s simply a matter of deciding how much protection you need, then comparing like policies.

Customize your policy

Some coverages are required, so learn what auto insurance you need to stay on the right side of the law in California, Nevada, Utah, or where you live.

Liability coverage comes into play if you cause an accident that harms someone else (bodily injury coverage, or BI) or damages property such as a house or fence (property damage coverage, or PD). Personal injury protection (PIP), or “no-fault” insurance, covers injuries to you or your passengers, even if you were driving (because bad things happen to awesome people). This coverage is key if you have so-so health coverage or tote passengers in your car. In addition to medical expenses, PIP can also cover loss of income, loss of essential services, and even funeral expenses if an accident results in death. Another option is to carry MedPay, coverage that is somewhat less robust that PIP, but still covers medical expenses for anyone in your vehicle who is injured during an accident or experiences an auto-related injury. Check with your insurer to learn if either PIP or MedPay are available in your state.

If you hit another car (or a tree, or a billboard), collision coverage helps repair or replace your vehicle. In an ideal world, when another driver hits you, they’ll have stellar coverage. But this is the real world. So if you’re hit by someone with measly car insurance—or none at all—uninsured and underinsured motorist coverages can save the day.

An uninsured motorist coverage provides a limited amount of coverage for injuries when you’re in an accident and the driver at fault doesn’t carry any liability insurance. An underinsured motorist insurance coverage will protect you when you’re in an accident caused by another driver whose liability coverage is too low to pay for your or your passengers’ medical expenses.

Murphy’s law dictates that disaster can strike even when you aren’t driving (think theft, vandalism, falling coconuts). Comprehensive coverage helps pay for damage unrelated to a collision.

Compare apples to apples

When comparing quotes, it’s tempting to get excited about a low premium (the cost of your insurance policy and what you pay up front to be insured). But before breaking into your happy dance, peruse the details of each policy.

Check the deductible, the out-of-pocket cost you’ll pay when submitting a claim. A higher deductible lowers your premium, which sounds pretty sweet, until you back into a telephone pole—and have to foot the entire repair bill. If you have cash reserves, though, a higher deductible might make sense.

As a ravenous person soon learns at an all-you-can eat buffet, it’s best to know your limits. That’s especially true when comparing auto liability coverage limits, the maximum dollar amounts your insurer will pay when you make a claim. Keep in mind that medical bills from a serious accident can rival Lady Gaga’s wardrobe budget. So experts recommend carrying liability coverage of at least $100,000 per person and $300,000 per accident, and property-damage coverage of $50,000.

Work the perks

If you find yourself in a predicament—perhaps stranded in a desolate area, horror-movie style—some insurers swoop in to the rescue, offering towing service, tire changes when you get a flat, or even gas delivery. Consider these perks as you compare car insurance quotes.

Auto insurance is like running shoes: You tend to get what you pay for. So buy the best coverage that you can comfortably afford.

Exceptional coverage. Expert service. Extra savings.