What is the best car insurance company?

This question comes up all the time. Car owners are always looking for the best car company with the best rates. It's the combination of good customer service and low rates that makes the best company. So, which auto insurance company is best?

That's a question that is not so simple to answer. Some companies with the lowest rates don't offer the best customer service. Some with the best customer service don't have the best rates. And the best insurance company for one person may not be the best for another. Furthermore, the best company in one state is almost never the best in another state, due to differences in state laws and regulations.

Check insurance company customer service and reputation

Most states have state government web sites that include a section for the state Insurance Commissioner. On those sites, many states rate auto insurance companies according to the number of customer complaints. You can also check with large car repair shops and body shops in your area. The managers of those shops know from experience who the good insurance companies are — the ones that handle customer claims efficiently and without problems.

We've found that the larger insurance companies, such as Allstate, Geico, Hartford, State Farm, and others, generally have good customer service. They typically process claims quickly, are generally fair in settlements, and most customers rate them well. In fact, in a survey of car insurance customers by Consumer Reports magazine, there was only a few points difference between the best and worst companies in the ranking. All rated high overall. The difference, then, is how they set rates.

All auto insurance company rates are different

Insurance companies set rates based partly on a number of factors that have nothing to do with customers' qualifications, as follows:

State laws - States all have laws and regulatory agencies that determine which insurance companies can do business in the state and how they are allowed to set rates and conduct their business.

Statistics - Insurance companies use statistical data about accidents, repair costs, and claim histories to help set rates. Such data can show wide differences between states, cities, driver age groups, marital status, and vehicle makes/models.

Business objectives - Insurance companies must make a profit to stay in business. Therefore, rates are set to provide a profit, although competition and state regulations tend to keep rates in check.

With all these variables in play, auto insurance rates are always different between companies. There are no "standard" rates. This is why it is so important to shop for rates with different companies. A company that has the best rates in one state doesn't necessarily have the best rates in another state. A company that has the best rates for one driver age group doesn't necessarily have the best rates for another age group. A company that has the best rates this year, may not have the best rates next year.

Then, of course, individual rates are set according to the specific qualifications of specific customers, using factors such as:

With all these additional variables, the only way to know which company offers the best rates is to get quotes from multiple companies and compare them. There is simply no other way to determine which auto insurance company is better than another.

How to get rates from auto insurance companies

In the old days, you would have to call or visit insurance companies and get rates from each one. It required a lot of time and legwork. Now, with the Internet, it's much easier.

Most car insurance companies work through "brokerage" web sites such as NetQuote.com to provide competitive rate quotes to potential customers. The benefit to the insuance company is that they can cut their cost and offer lower rates. The benefit to customers is that they can get multiple rates quotes from different insuance companies at the same time by filling out one form.

By getting quotes from different companies, you can compare rates and go with the one you feel is best for you. If you already have insurance, it is almost certain that you can get a better rate by using this method. And you should check rates at least once a year. If you have already pre-paid your premiums with one company and decide to switch, you can get a refund on the un-used premiums from your old company.

We recommend NetQuote.com, one of the largest and oldest online auto insurance brokers. They work with over 100 different insurance companies and, when you fill out their form, you'll be matched up with the top 5 companies that have the best rates for your specific situation and needs.

For additional information about finding cheap auto insurance, see our article, How to Get Cheap Auto Insurance, for more details.