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Customers aren’t happy with their car insurance and are switching carriers, but the cheapest option isn’t always the best

Despite rebates and discounts, customers are switching car insurance providers. However, cheaper isn't always the best option. ...
Auto repairman showing charges to woman in auto shop.
Switching to the cheapest car insurance isn't always the best option.

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    • Despite over $10 billion in rebates and discounts from car insurance providers, consumers are still dissatified.
    • Consumers are switching providers for the cheapest premium they can find.
    • However, cheap premiums don't guarantee proper coverage or good claims service.
    • See Insider's picks for the best car insurance companies.

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The auto insurance industry has offered over $10 billion in rebates and discounts due to the pandemic, but according to a J.D. Power Insurance Intelligence study, as the pandemic worsened, so did customer satisfaction. Most customers said they never even received information about the COVID-19 related rebates or discounts.

A more recent study by J.D. Power shows dissatisfaction has grown, and customers are switching insurers. Usually, the cheapest premium wins out. However, customers are forgetting the old adage of "buyer beware," because the cheapest price doesn't mean you'll get good claims service or proper coverage.

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The great debate: price versus claims service

You get what you pay for. Usually, going for a higher price with an established auto insurance brand means better claims and customer service. If you get a cheap price, you may be giving up customer service, or, worse, coverage.

According to Tom Super, head of property and casualty for J.D. Power, the average consumer wants things to be fast, cheap, and convenient. Many consumers are applying that to their insurance coverage. He noted that being cheap on car insurance doesn't impact consumers tangibly like getting a cheap car, which you feel immediately. Super said there's the potential to be underinsured when going for the cheapest insurance coverage.

Questions to ask before buying car insurance

Like with homeowners insurance, getting the cheapest auto insurance rate is probably not going to provide the coverage you need, especially if you have a new or newer used vehicle. If you have an old beater, maybe the cheapest liability coverage is enough.

Question consumers need to ask inlcude:

  1. If my insurance company doesn't cover this, can I afford to pay out-of-pocket to repair or replace? If no, then you need to make sure you get enough coverage, which probably isn't cheap.
  2. Do I care if my carrier is responsive during the claims process? Does prompt customer service matter? If yes, then you need to focus on insurance companies with high rankings for claims and customer satisfaction.

Car insurance companies with high claims satisfaction

Claims satisfaction refers to how customers feel about how insurance companies settle claims. Below are rankings from J.D. Power based on a 1,000-point scale.

  1. NJM Insurance (909)
  2. Amica Mutual (907)
  3. Auto-Owners (890) and USAA*
  4. The Hartford (888)
  5. MetLife (886)
  6. State Farm (881)
  7. Erie Insurance (880)
  8. Allstate (876)
  9. Nationwide (876)
  10. Farmers (872)
  11. Industry Average (872)
  12. Esurance (871)
  13. GEICO (871)
  14. Safeco (870)
  15. Liberty Mutual (867)
  16. Auto Club So. California (866)
  17. Country Financial (863)
  18. American Family (862)
  19. CSAA (862)
  20. Travelers (861)
  21. Auto Club Group (858)
  22. Progressive (856)
  23. Mercury (849)
  24. MAPFRE (844)
  25. National General (815)

*Because USAA is only available to military and veterans, it is not included in the official rankin. Had it been ranked, it would have tied for third place

Car insurance companies with high customer satisfaction

Unlike claims satisfaction, which focuses only on the claims process, customer satisfaction focuses on five factors: (1) billing process and policy information; (2) claims; (3) interaction; (4) policy offerings; and (5) price.

According to the 2021 J.D. Power survey, these companies have high rankings for customer satisfaction regionally.

Region Best company for customer satisfaction
California Wawanesa (for a second consecutive year)

Central

(Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North & South Dakota, Oklahoma)

Shelter Insurance
Florida State Farm

Mid-Atlantic

(Delaware, DC, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia)

NJM Insurance

New England

(Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont)

Amica Mutual (for a ninth consecutive year)
New York State Farm (for a second consecutive year)

North Central

(Illinois, Indiana, Michigan, Ohio, Wisconsin)

Erie Insurance

Northwest

(Idaho, Montana, Oregon, Washington, Wyoming)

State Farm

Southeast

(Alabama, Georgia, Kentucky, Louisiana, Mississippi, North & South Carolina, Tennessee)

Farm Bureau Insurance – Tennessee (for a tenth consecutive year)

Southwest

(Arizona, Colorado, Nevada, New Mexico, Utah)

American Family (for a second consecutive year)
Texas Texas Farm Bureau (for a tenth consecutive year)

Understand the different coverage options for car insurance

There are four main types of car insurance: comprehensive, collision, and liability (which is required by state law). Full coverage is a combination of the three different types of insurance.

Liability coverage is required by law and covers damage you cause to other vehicles and their passengers. Minimum liability insurance requirements vary by state.

Comprehensive coverage replaces or repairs your vehicle if it's stolen or damaged. Comprehensive coverage typically covers damage from fire, vandalism, and falling objects (like a tree or hail).

Collision insurance covers your vehicle if you're in an accident or collision.

If you lease or finance your vehicle, your lender may require both comprehensive and collision coverage, but full coverage is a better option because it gives you the most coverage across the board.

Comprehensive Collision Liability Full
Theft Yes No No Yes
Vandalism Yes No No Yes
Fire Yes No No Yes
Natural disaster Yes No No Yes
Falling objects (tree) Yes No No Yes
Animal damage Yes No No Yes
Collision/accident No Yes No Yes
Rollover No Yes No Yes
Bodily injury/medical bills No No Yes Yes
Physical damage No No Yes Yes
Property damage No No Yes Yes
Uninsured motorist No No Yes Yes

Average price for car insurance by state and insurance type

Your coverage will be based on several factors: type of vehicle, your location (urban versus rural), mileage, credit score, and driving record. Some states do not allow insurance companies to use your age, gender, or credit score as factors to determine your insurance premium. Therefore, the costs will vary greatly state by state.

Although online quote tools are helpful to get multiple quotes, the best policy is the one that offers the most coverage types and limits for your car.

The table below shows costs by state for the average price paid for collision, liability, and comprehensive coverage. The "average cost" column is the annual insurance premium the average person in that state paid.

State Liability Collision Comprehensive Average cost
Alabama $511.13 $380.51 $175.28 $904.56
Alaska $576.09 $387.12 $147.87 $965.44
Arizona $646.75 $326.28 $208.25 $1,046.40
Arkansas $486.72 $375.25 $235.36 $898.89
California $616.51 $483.60 $94.72 $1,034.05
Colorado $687.40 $330.50 $272.44 $1,132.81
Connecticut $784.70 $407.54 $133.86 $1,216.55
Delaware $900.32 $352.86 $140.52 $1,291.39
D.C. $809.41 $535.96 $228.71 $1,429.43
Florida $1,009.94 $361.79 $149.26 $1,426.46
Georgia $797.80 $408.41 $176.31 $1,212.04
Hawaii $479.27 $357.78 $107.66 $829.15
Idaho $425.89 $262.67 $139.75 $722.06
Illinois $515.94 $339.04 $140.57 $916.49
Indiana $442.69 $286.49 $135.63 $767.72
Iowa $348.87 $252.65 $214.65 $700.71
Kansas $421.78 $287.24 $276.33 $805.15
Kentucky $611.54 $312.51 $164.68 $936.91
Louisiana $1,015.36 $487.44 $248.57 $1,545.82
Maine $374.59 $294.80 $113.33 $686.25
Maryland $737.73 $422.06 $167.61 $1,211.83
Massachusetts $658.47 $440.55 $147.06 $1,167.16
Michigan $952.15 $479.11 $159.08 $1,469.73
Minnesota $499.48 $265.74 $206.45 $872.65
Mississippi $538.35 $372.17 $239.34 $971.19
Missouri $520.45 $315.49 $216.92 $913.81
Montana $435.81 $283.65 $306.00 $825.87
Nebraska $429.35 $272.48 $260.97 $796.87
Nevada $900.40 $366.54 $119.28 $1,260.43
New Hampshire $436.76 $327.30 $118.58 $847.58
New Jersey $955.93 $414.39 $130.26 $1,385.61
New Mexico $576.81 $311.24 $214.10 $915.62
New York $920.25 $457.77 $180.64 $1,425.00
North Carolina $391.29 $342.13 $137.45 $734.06
North Dakota $307.97 $279.45 $256.76 $686.08
Ohio $448.59 $302.57 $130.74 $794.91
Oklahoma $508.89 $346.73 $267.99 $915.49
Oregon $689.74 $280.61 $106.87 $990.21
Pennsylvania $555.42 $376.21 $169.21 $991.23
Rhode Island $885.33 $474.58 $140.40 $1,333.12
South Carolina $702.37 $318.08 $207.09 $1,093.97
South Dakota $333.44 $244.47 $327.11 $721.67
Tennessee $477.07 $355.01 $163.83 $855.78
Texas $659.47 $442.88 $269.90 $1,152.25
Utah $601.77 $309.20 $127.53 $941.14
Vermont $376.99 $329.47 $147.81 $778.29
Virginia $492.68 $316.05 $148.25 $853.78
Washington $689.18 $312.65 $118.19 $1,035.34
West Virginia $521.74 $350.20 $224.86 $938.71
Wisconsin $422.28 $247.95 $159.82 $755.97
Wyoming $356.25 $297.61 $317.22 $765.81

Data from the Insurance Information Institute (III)

Related Content Module: More on Car Insurance

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