The best car insurance companies based on cost, coverage and service

Car insurance is a necessary expense for most Americans, since driving without it is illegal and public transportation options are limited outside of major U.S. cities. Insuring a vehicle can be costly, especially if you're a new driver or insuring a luxury car, but it can save you tens of thousands of dollars in case of damage or theft.

The ideal car insurance company combines good coverage with reasonable rates and excellent customer service. Although cost matters when shopping for car insurance, it shouldn't be the only factor. You'll want to choose a company with a high customer satisfaction rating. That way, the process is smooth and hassle-free when you need to file a claim. At the same time, a good car insurance company will offer plenty of discounts to incentivize good customers and lower your car insurance rates. 

So what's the best car insurance company? That depends on a variety of factors. Below, CNBC Select breaks down the top auto insurance companies into six main categories. (See our methodology for more information on how we chose the best car insurance companies.)

Geico is the best car insurance company for affordable coverage, offering the lowest average premiums for both minimum and comprehensive coverage. It offers 16 discounts, giving reduced premiums for things like good driving, taking a defensive driving course and insuring multiple vehicles. Geico also has a wide range of other insurance products, including homeowners insurance and renters insurance, that make it easy to bundle and save on coverage.

Average annual premium for full coverage: $1,353

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State Farm is the largest auto insurance company in the U.S. based on market share, according to the National Association of Insurance Commissioners (NAIC). It enjoys the highest average J.D. Power score of the large insurers, making it best-in-class for customer satisfaction.

Average annual premium for full coverage: $1,480

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Nationwide offers one of the widest car insurance networks, with coverage available in 46 states plus the District of Columbia (all states except Alaska, Hawaii, Louisiana and Massachusetts). This is an important distinction because multiple companies competing for your business equals lower premiums. It also stands out for its usage-based insurance program, SmartMiles.

Average annual premium for full coverage: $1,422

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Auto-Owners is an affordable option for those looking for minimum coverage, with the average annual premium for minimum coverage just $325. CNBC Select also selected Auto-Owners insurance as one of the top picks for young adult drivers and seniors. However, coverage is only available in 26 states.

Average annual premium for full coverage: $1,361

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Amica is a top choice for its wide availability of discounts, with a total of 18 ways to save. There are several discounts for young drivers, including a driver training discount and a good student discount. Other discounts focus more on the car you drive, including a discount for anti-theft systems, electronic stability control, and features like forward-collision warning. Additionally, you can save by bundling your home and auto insurance, insuring multiple vehicles, and paying your premium in full.

Average annual premium for full coverage: $1,467

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Progressive is a top insurer for high-risk drivers, particularly for those with a DUI or DWI on their record. While high-risk drivers often pay higher insurance premiums than the average driver, Progressive generally offers lower rates for these types of drivers than other insurers. Its average full-coverage premium after a DUI or DWI is $2,049.

Average annual premium for full coverage: $1,642

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USAA stands out for enjoying high rankings on multiple factors. For starters, it offers the lowest average premiums. Equally important is customer satisfaction as no one wants to deal with a difficult customer service experience when filing a claim. Luckily, USAA enjoys the highest J.D. Power customer satisfaction scores, so you know you're "in good hands." Its consistently affordable rates and high customer service ratings also make it a top choice for cheap homeowners insurance to bundle and save.

The only catch? It's not available to everyone — only military members, veterans and their immediate family members are eligible for a USAA car insurance policy.

Average annual premium for full coverage: $1,361

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Geico has been in business since 1936 and has since grown to become a major player in the auto insurance space. With affordable premiums and relatively high customer service ratings, it's easy to see why.

NAIC complaint index (1 is average)

1.35, above average 

J.D. Power rating

857 out of 1,000 

A.M. Best rating

A++

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State Farm caters to all types of drivers, with coverage available in all states except Massachusetts and Rhode Island. State Farm offers a wide range of other insurance products besides auto insurance, so be sure to bundle whatever you can into your quote. You may be able to save money on the total cost of your policy. 

NAIC complaint index (1 is average)

1.85, above average 

J.D. Power rating

877 out of 1,000 

A.M. Best rating

A++

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Nationwide combines affordable prices with strong customer service ratings. It offers lots of policy customization options, including add-ons like roadside assistance, accident forgiveness and a vanishing deductible. It also offers many other types of insurance products you can bundle your policy with.

NAIC complaint index (1 is average)

1.47, above average 

J.D. Power rating

861 out of 1,000 

A.M. Best rating

A+

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Auto-Owners boasts high marks from J.D. Power and a below-average complaint index from the National Association of Insurance Commissioners (NAIC). Paired with relatively low premiums, and Auto-Owners car insurance stands out from the competition. The company offers 12 discounts, including three discounts specifically for students. It also offers specialty coverages for classic cars and modified or converted accessible cars.

NAIC complaint index (1 is average)

0.78, below average 

J.D. Power rating

862 out of 1,000 

A.M. Best rating

A++

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In addition to a variety of discounts, Amica offers competitive prices on its auto insurance policies. It also consistently ranks highly in J.D. Power rankings for customer satisfaction and claims satisfaction. Coverage is available in all states except for Hawaii.

NAIC complaint index (1 is average)

0.98, about average 

J.D. Power rating

909 out of 1,000 

A.M. Best rating

A+

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Progressive has become one of the nation's largest auto insurance providers. It offers coverage to all types of drivers across all 50 states and offers some useful features like an accident forgiveness program that can help drivers avoid a rate increase after an accident. However, Progressive falls a bit short when it comes to customer satisfaction ratings.

NAIC complaint index (1 is average)

1.98, above average 

J.D. Power rating

853 out of 1,000 

A.M. Best rating

A+

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If you're eligible for USAA, this company's reasonable prices and consistently high customer service ratings are certainly a draw. It's been serving U.S. military members and their families for about 100 years and offers a variety of discounts. Keep in mind that USAA membership can also be passed between generations.

NAIC complaint index (1 is average)

2.01, above average 

J.D. Power rating

875 out of 1,000 

A.M. Best rating

A++

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Car insurance covers damage, theft and bodily injury in case of an accident. You pay a monthly (or bi-annual) premium based on the coverage and policy type needed. In case of an accident, you can file a claim and your insurance company will pay out damages based on various criteria. Filing claims can sometimes lead to higher premiums, so you'll want to do so cautiously. Car insurance companies offer lower premiums to drivers with clean records, as they're less likely to file damage claims. 

Car insurance has five main types of car insurance coverage you can incorporate into your policy. Each one offers varying degrees of protection in case of a loss. At a minimum, you will need liability coverage, which protects against damage and bodily injury. Depending on the level of protection you're looking for, you might want to add additional coverage to your policy. Here's a look at some of those options:

• Liability coverage: Basic coverage that is mandatory in most states. There are two types of liability coverage, protecting a policyholder against personal injuries (bodily injury liability) and property damage (property damage liability).
• Collision coverage: Covers repairs stemming from a collision with an object rather than another vehicle. 
• Comprehensive coverage: Protects your vehicle in case of damage caused by non-vehicular collision. Covered events include theft, weather-related damage and vandalism. 
• Personal injury protection: Pays your medical expenses and lost income from an accident. 
• Uninsured motorist coverage: Covers your vehicle against hit-and-run accidents.

Car insurance rates may vary considerably from one state to the next due to varying regulations and requirements. For instance, car insurance rates are typically higher in no-fault states such as Michigan and New York than other parts of the country. Below are the average car insurance costs by state.

There are several factors that influence the price you'll pay to cover your car, including ones you can control and some you can't. Here are a few of the factors considered:

• Your coverage amount. The amount of coverage you choose (full coverage versus minimum coverage), the types of coverage in your policy, and the limits on those policies will change the premium. Your deductible, or the amount you'll be responsible for covering if you need to file a claim, can also influence your premium — typically, the higher the deductible, the lower the premium.
• Your personal infomation. You'll likely be asked a lot of questions about yourself when shopping for car insurance, including questions about your age, whether you own a home, are married and in some states, even your gender identity. Your ZIP code and the amount you drive per year can also affect the price you pay.
• Your credit score. Your credit score plays a big part in the price you pay in some states (it's not allowed to be considered as a factor in California, Hawaii, Massachusetts and Michigan). The higher your credit score, typically, the less you'll pay for insurance.
• Your driving history. Have several accidents on your record, or a violation like a DUI/DWI? Those factors can make your car insurance more expensive.
• Your car and its features. A six-figure sports car will cost much more to insure than an affordable SUV. While replacement costs can factor into this difference, discounts for safety features can also play a part.

The best way to find your perfect car insurance company is to shop around.

Each car insurance company considers the factors that affect your premium differently, and the company that gave your friend or neighbor a great rate may consider your information differently. Consider starting with companies you have a relationship with, including your homeowners insurance company, renters insurance company. You may be able to bundle your coverage and save.

To find the right match, you'll want to get several quotes with the amount of car insurance that's a good fit for you. Choose a policy that meets or exceeds your state's minimum auto insurance requirements. And, since car insurance can be a financial protection, it's a good idea to get a policy that equals or exceeds your net worth, or the total value of assets you own minus any debt.

Once you've determined that amount, you'll want to get several quotes from several insurers, keeping the limits, coverage options and deductible the same. With comparable quotes, you can then look for the lowest premium.

Shopping around for your car insurance every year can be a good way to make sure you're always getting the best price.

Car insurance is an inevitable, costly expense for most Americans, and many companies compete for your business. Understanding how premiums are priced and requesting multiple quotes can save money while ensuring your vehicle is protected against damage and loss. Factor in customer satisfaction ratings and you'll increase your odds of being a happy customer if you ever have to file a claim.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.

To determine the best car insurance companies, CNBC Select analyzed dozens of U.S. insurance companies that come with policies to suit an array of needs.

When narrowing down and ranking the best car insurance companies, we focused on average cost, coverage, availability, ease of use and customer satisfaction using data from the National Association of Insurance Commissioners, AM Best, J.D. Power rankings and car insurance premium data from Bankrate.com.

The average annual premium data is based on a 40-year-old driver with a clean driving record and good credit. The driver insures a 2020 Toyota Camry, commutes five days a week and drives 12,000 miles annually, with the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

After reviewing the above features, we sorted our recommendations by best for affordability, best for customer satisfaction, best for discounts, best for high-risk drivers and best for military members and veterans.

Note that the premiums and policy structures advertised for car insurance companies are subject to fluctuate in accordance with the company's policies.

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