The Best Car Insurance Companies to Protect Your Car
You’ve probably dreamed of getting your own car when you turn into a self-sufficient adult. Having a vehicle provides so many perks, but what many people also tend to overlook that it also comes with a lot of responsibilities. One of which is to make sure that you’re financially capable for any event that can happen when you’re driving the car.
So, when you think of getting a car, you must also think of getting car insurance. You shouldn’t get one without the other. Since accidents happen even to the best and most careful of drivers, the consequences can result in complex legal battles and financial dilemmas. And you wouldn’t want to get into a financial mess because you were in an accident that may be or not be your fault.
Getting car insurance is not only a legal responsibility, but it is also a sensible decision if you want to protect your finances in the event of the unexpected. Unfortunately, there’s no universal standard as to what you should include in your policy because we have different driving habits, we have different budgets, and we have different coverage needs.
Different types of auto insurance offer different levels of protection, and you can add more to your policy with a few more features to get the ultimate coverage. It is therefore essential to study the types of car insurance and what they cover, and then assess your own needs and preferences to nail down the best and most suitable policy for you.
What is Car Insurance For?
You’ve always been a careful driver, but you continue to pay for auto insurance since you’ve owned your car. With each premium payment, you wonder what is the car insurance is for when you’re never involved in an auto accident. At this point, you start thinking: is paying car insurance even worth it?
As a matter of fact, even if you’re not using car insurance (and you wish you never would), there are several benefits to keep paying it.
Smaller Payments for Potentially Huge Expenses
If you think you’re paying too much for car insurance premiums, imagine how much it would cost you if you need to spend on vehicle repairs, property damage, bodily injuries and more. A seemingly simple accident can spiral into a financial nightmare. But with insurance coverage, you are saved from almost, if not all, of these expenses.
For Your Own Protection
Accidents happen to anyone at any time. Even the most careful driver can get hit by a speeding truck, for instance, and it can lead to serious financial consequences. Having car insurance “insures” you and your family of the serious monetary costs so you wouldn’t have to spend out-of-the-pocket.
It is Your Responsibility
Part of being a responsible car owner is to rectify any situation that an accident that may have been caused. If you’re the one responsible for the damages, a car insurance policy gives you coverage and protection so you wouldn’t have to go into legal battles or suffer from costly financial consequences. If you happen to be the victim, you are also entitled to compensation. Most states require that you carry car insurance, not just for your own protection, but for everybody else who might get involved.
It’s Too Risky Not to Have a Car Insurance
If you’re frustrated about paying car insurance month after month, consider your struggle should your car get damaged or if your driving caused you injury or to another person. When you come to think of it, the cost of the insurance is just the fraction of cost for potentially serious accidents which can run to thousands of dollars. How well are you going to sleep at night if you were involved in a road accident and you weren’t insured? Not only are you paying for your peace of mind, but you also pay to reduce the impacts of car-related incidents in the future. If you can afford to own a car, then you must afford to have car insurance.
In the US, every car owner is mandated to take at least the basic auto insurance coverage, and the laws can every state. For an additional cost, you may take additional coverage to suit your needs and risks.
Types of Car Insurance
Car insurance comes in three main types, and they vary when it comes to what they can cover and how much coverage they provide. As a driver and car owner, it is essential to understand what and how much coverage you need, handpick the right features and let go of the unnecessary ones. Too often, car insurance premiums surge in costs when you add an extra layer of protection over the other, so it’s wise to shop first and even customize your plan to fit your needs best.
Here the three types of car insurance and their respective coverages:
The liability car insurance gives you insurance when you’re at fault or are liable to property damage and bodily injuries while using or driving your car. In most states, every car owner needs to carry at least the primary liability car insurance. With the liability insurance, you are covered for these expenses:
Bodily Injury Liability Insurance – this provides coverage for another person’s medical costs due to bodily injuries that you caused. Bodily injury liability insurance may also cover you for legal fees (should the other party file for a lawsuit), as well as loss of wages as a result of the accident.
Property Damage Liability Insurance – if the crash caused damages to property (cars, fences, poles, etc.), property damage insurance can cover you for repairs and replacement expenses.
Consider liability insurance as the baseline or the most basic car insurance you need to purchase. Every state has its minimum limit for both bodily injury and property damage insurance, but note that it doesn’t cover your own personal injury and property damage expenses. If you wish to get covered for these, you need to purchase additional features to your basic liability car insurance at an extra cost.
It is also important to note that in most cases, insurers bundle the bodily injury and property damage insurance in one package (per person, per accident and per property damage). For instance, if you have the policy 25/50/10, the insuring company can guarantee the maximum coverage as:
$25,000 limit per bodily per person / $50,000 limit per bodily injury per accident / $10,000 limit per property damage. If the medical costs or property damage repairs exceed these numbers, then you would have to pay for the excess out-of-the-pocket.
When your car gets into a collision accident, and it was your fault, you may be insured for collision coverage. You may claim collision coverage when you get into a crash with another vehicle, or hit into a tree, fence, guard rail or drove into a ditch or pothole. It covers the financial cost of repairs and replacement sustained by your vehicle during the accident. It does not include the other party’s vehicle damage, as the liability property damage insurance covers that.
There are instances when you can take advantage of the collision coverage when the other driver caused the accident, but his insurance company does not act immediately to your claims. Your insurance company may then take the other driver’s payment as reimbursement.
Collision insurance is your best bet to overcome the struggle of costly vehicle repairs financially. But unlike the liability auto insurance policy, collision coverage requires a deductible. If you pay a higher deductible, your monthly premium goes down. And if you pay a lower deductible, your monthly premium can go up. When it comes to repair costs, you first need to pay the deductible, and then the insurance company provides the amount anything in excess to it, up to your policy limit. For instance, if the cost of repairing your vehicle is $2500, and you pay a deductible of $500, the insurer covers $2000 of the expense.
In case your car was “totaled” from the accident, or repairing it costs more than its actual value, the insurer may instead offer a replacement. In this scenario, you must take note that you are only provided financial compensation for the real worth of your car at the time of the accident.
Collision auto insurance is optional. But if your car is not yet fully paid, lenders typically require collision coverage. The cost of collision insurance also increases your premiums, but the price that you have to pay vary on several factors such as your driving history, cost of the car and the age of the driver. If you have several driving violations in the past or has gotten into several accidents, you can expect to pay more than drivers who don’t.
“Full” auto insurance is a bit of misnomer as no single insurance policy covers full coverage. It is a term used to define a packaged insurance that combines liability, collision and comprehensive into a single plan. In most cases, you can tailor fit your full auto insurance to meet your needs and preferences.
The full coverage insurance is composed of the three core groups of insurance types:
- Liability insurance – the most basic kind of insurance any driver must have
- Collision insurance – covers for expenses caused by a collision where you are at fault
- Comprehensive insurance – covers for costs that were caused other than a collision, such as theft, vandalism, and damages caused by natural disasters
Apart from these policies, full coverage may consist of a few more add-ons, such as:
- medical insurance – to pay for medical expenses sustained from vehicular accidents
- uninsured and underinsured motorist – used to supplement costs if the other party has little or no insurance at all
- Gap insurance – pays for the remaining amount of money on your car loan and the car’s value in case it gets totaled in an accident
- Rental – pays for the rental car expenses while you wait for your car’s repairs after being involved in an accident
- Towing – pays for emergency roadside assistance if you have been involved in an accident and you need your car towed
These add-ons to your full insurance policy are optional – you may or may not get them. It is best to determine which of these you need, assess your driving habits and how much you can afford. Your insurance agent won’t likely have pre-packaged full insurance, and it would be up to you what to put on it to provide the most coverage.
How Much Insurance Do You Need?
There is no universal answer to this question. One driver’s car insurance might be enough for him, but it won’t be for you. The best that you can do to find out how much protection that you need is to look into these factors:
- Deductible – you may opt for a low or high deductible, but what you ultimately decide on will also impact your insurance premiums. Choose a deductible that you are most financially comfortable with.
- What your coverage includes – you must have the basic liability insurance, but taking on extra coverages are optional. You may benefit for additional medical coverage to supplement your healthcare insurance and gap insurance in case your car has not yet been paid fully. You can add a few more features, but remember that they do come at an extra cost.
- Limits of your coverage – this is the maximum amount that your insurer can cover for you. You become financially responsible for anything that exceeds such limits.
Also, other factors come into play when determining the right level of insurance. If you are not as financially stable as you desire to be and you drive your car, its wise to settle for the basic liability insurance at this point. However, as you acquire more assets which you need to protect in the long run, or if you drive a newer and more expensive vehicle, it’s better to get additional coverage. Also, take into account if other people are using your car. If your teenage son borrowed it and accidentally hit into a tree on his way home, things can get a little more complicated.
Perhaps the most important thing to remember is that no matter where you stand financially, what your driving habits are or how old your car is, it’s always better to have insurance and none at all. You could check your policy from time to time as your situation changes to ensure you’re still getting enough coverage, and make the switch, upgrade or downgrade if you deemed fit. But no matter what you choose, don’t go without insurance.
Best Car Insurance Companies
If you’re on the market for car insurance policies, the first thing that you should do is determine how much coverage you need and where to get such policy from. There is a myriad of options when it comes to insurance companies, so take your time shopping and comparing notes. Ultimately, you want to find a policy that provides adequate coverage, so you don’t end up overpaying and taking money out-of-the-pocket.
State Farm is one of the most well-known car insurance providers in the country. According to the Insurance Information Institute of 2018, it is also the largest insurance corporation in the US. With reputation dating back as far as 1922, State Farm has managed to maintain its solid reputation for providing high-quality insurance policies and the highest level of customer service in the industry. And along with its established name and reputation, the company has also earned the highest rating of Best A.M. Outlook for its financial standing and stability.
State Farm is a sound choice for car insurance due to its efficient claims processing. The company makes it incredibly easy to file for a claim, whether in person with one of its 18,000 insurance agents dispersed in most states, through their intuitive mobile app, a phone call or an email. Also, according to J.D. Power, State Farm’s superior claims handling has earned the company positive remarks from policy owners.
Some of State Farms fantastic features is its comprehensive car rental insurance. Not only does the company provide coverage for car rental for when your car is in repair due to collisions, but it also offers the necessary meals and lodging if your home is more than 50 miles away. Additionally, State Farm is one of the best providers of ridesharing insurance, giving car owners coverage for both personal and business (if the car is driven for companies like Lyft and Uber), and is available in 46 states.
Allstate is an all-around insurance provider, but it is most known for its car insurance products. The company was established in 1931 and has grown exponentially since then. Today, All State, has over 79,000 agents in the country.
Allstate offers the usual policies and coverages one would find in most auto insurance packages, but the company also provides a few more perks that policyholders can take advantage of. For instance, Allstate also has accident forgiveness which allows you to enjoy the same rates even after getting involved in an accident where you’re at fault. It also has a ridesharing coverage for people who use their cars for commercial purposes (such as Uber and Lyft) and is available in 47 states.
Allstate also offers some cool rewards and incentives for drivers. They have the Safe Driving Bonus which entitles you for a check if you have a clean driving record while under their policy, as well as Deductible rewards which take off $100-$500 off your deductible if you’ve had zero driving violations for a year. Lastly, there’s the new car replacement wherein Allstate provides you with coverage for a new car cost (not its depreciated value) if you were involved in an accident and your car has been totaled within its first two model years.
Allstate is a wise option for people looking for normal car insurance policies but wants something more. It is particularly beneficial for young and new drivers because Allstate offers a comprehensive resource online, whether one is shopping for the most suitable policies, filing a claim and building an insurance package for new drivers. It even has a student discount program wherein students who have completed All State’s teenSmart driver’s program and have good grades can get a discount on their policies.
You have everything you need from a traditional car insurance policy, and perhaps a few more perks, with Nationwide auto insurance. Nationwide is a 100 Fortune company that has a long-standing reputation in the financial services sector. As for auto insurance, the company offers what you’re likely to expect and at a competitive price.
But Nationwide has a few more to offer. It allows customers to create a custom package consisting of liability insurance plus a few more features, such as accident forgiveness. Nationwide provides one forgiveness for every policy, allowing policyholders to retain their usual rates even after you or another person in your plan was at fault of the accident. Additionally, there’s the vanishing deductible feature wherein the company rewards you with as little as $100 to as much as $500 on your deductible for every year that you don’t incur a driving violation.
But probably Nationwide’s unique offering is the SmartRide, a tool that’s attached to your vehicle to monitor driving habits. People who have excellent driving data via the SmartRide can enjoy as much as 40% discount on their policies.
With its familiar lizard mascot, Geico is easily one of the most recognizable auto insurance company in the country. As Geico promises to have the lowest rates in the industry, it also appeals to people who enjoy bargain hunting than who place a premium for customer service.
But with that said, Geico has a complete range of the standard auto insurance you are looking for. On top of the basic liability insurance, you can add more features to your policy to avail the most protection. It is a good provider if you’re looking for ridesharing insurance, accident forgiveness, and rental car coverage.
Geico is also an excellent choice for people who’d instead transact online, although the company does employ more than 36,000 agents across the various parts of the country. The company website and mobile app are easy to use so that you can ask for a quote, pay for premiums and even file for a claim conveniently.
Farmers Insurance is the seventh largest car insurance provider in the US. With over 85 years of reputation in the financial services industry, Farmers Insurance continues to be a top choice for car insurance policies for both new and seasoned drivers.
Farmers insurance offers standard vehicle insurance policies as well as optional coverages at an extra cost. Its major selling point is that it is one of the lowest quoted policy providers, appealing to drivers who need coverage but at an affordable price tag.
As for the add-ons, Farmers Insurance provides some cool and nifty extra coverages on top of your basic policy. One of them is the New Car Pledge which promises to cover the cost of a brand-new car should it get totaled in the first two years of car ownership, or before the vehicle hits its 24,000 mileage, whichever comes first. There’s also the No-Fault No Foul feature wherein you get to keep your usual rates despite being at fault of a car accident. Meanwhile, the Farmers Rideshare add-on is an excellent investment for drivers who use their cars for both personal and income-generating activities such as Lyft and Uber, at a very competitive price.
Other features you may include in your policy are towing and roadside assistance, extended customized equipment coverage, loss of use and accident forgiveness.
Esurance is a subsidiary of the giant insurance company, All State, and offers a buffet of auto insurance policies to appeal to all types of drivers. Looking at their rates, you’ll find that Esurance’s prices are well within industry standard and at par with most competitors.
Esurance’s highlight feature is its intuitive and easy-to-use mobile and web apps that allow customers to do everything online. You can send a photo or video to report a car crash, process your payments online and even report a claim virtually. While Esurance does not have personal agents, it offers a 24/7 chat support to cater to your concerns. With that said, Esurance is a good option for people who are tech-savvy and those who’d instead transact online than physically meet up with their agents.
Additionally, Esurance also provides some generous discounts on policies for people who are making the switch from another provider to Esurance; full payments and bundling. Another great feature is the DriveSense program wherein drivers install a monitor into their cars and Esurance gathers data on their driving habits. The safer you drive, the more discount you’ll get.
Although you might think that a car insurance premium is another expense that dents the budget, it’s also an expense you shouldn’t live without. It is more important that you’re paying for premiums that could a fraction of the cost of property or injury expenses should you meet an accident uninsured.
But you don’t have to go with the highest premiums as well. You need to pick the best provider offering adequate coverage you deem fit for your lifestyle and budget. It’s also essential to check in with your policy every once in a while, to make sure you’re still getting the coverage you need, especially after a significant life change.
But even with insurance, it pays to be a careful driver overall. Car insurance is just there to back you up just in case, but your first level of protection is to try to prevent getting into an accident when you can.
Cary Silverman is a consummate entrepreneur having sold multiple companies during his 20 years of business experience in the financial industry, but for him, it isn’t about the money. His success is rooted in his passion to focus on doing something better today than it was done yesterday. These days, he’s the CEO of Waldo General, Inc. that oversees the operation of King of Kash.