What is car insurance?
Car insurance is a contract between you and the insurance company that provides you with specific coverage in exchange for your premium payments. A car insurance policy is the contract that outlines what you can make claims for and your duties as a customer.
The best car insurance policies cover liability (meaning damage and injuries you cause to others), damage to your own vehicle, and car accident injuries to you and your passengers.
Which company has the best car insurance?
Erie, Nationwide, Travelers and USAA have the best car insurance, according to Forbes Advisor’s analysis. We evaluated costs for a variety of drivers, available coverage types, complaints and collision repair to identify the top companies.
Drivers’ needs vary, so use our analysis as a jumping-off point in your quest for the car insurance company that best fits your specific situation.
How can I find the best price on car insurance?
The key to finding a good deal is to get car insurance quotes from multiple companies. That’s the only way you’ll know what companies are going to charge and which companies are coming in with the lowest rates.
Another good savings strategy is to bundle auto insurance with another policy, such as homeowners or renters insurance. Buying more than one policy from the same company typically results in a decent discount.
What car insurance discounts should I look for?
Look for car insurance discounts that fit your driving profile. Seek out a good driver discount if you have a clean driving record. Look for a bundling discount if you buy your auto and home insurance with the same company or a multi-car discount if you have two or more cars on your policy.
There are a wide variety of car insurance discounts offered by insurers, so ask your agent if there are any you are missing out on—like going paperless by receiving insurance bills and policies electronically for a small saving. Check what car insurance discounts for students you can obtain if you have a young driver in your household.
Is car insurance getting more expensive?
The cost of auto insurance continues its upward trend, with drivers spending an average of 1.4% more on car insurance in January 2024 compared to December 2023, according to the Bureau of Labor Statistics (BLS). Every month the BLS tracks the average costs of goods and services—such as auto insurance.
Car insurance costs have gone up 20.6% year-over-year (January 2023 to January 2024), nearly the highest increase across all the expenditures tracked by the BLS. The rate increases do not seem to be slowing. The BLS data show that car insurance costs have consistently gone up month after month since January 2022—that is 25 consecutive months of cost increases.
Auto insurance rates have continually escalated due to increased claims costs for insurers, which pass on the higher costs to customers in the form of higher rates. The uptick in claims expenses is fueled by more costly car parts, labor and medical bills.