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How to choose a car insurance company
A practical way to choose a car insurer: shortlist on price for identical coverage, then compare financial strength, complaints and claims service.
Choose a car insurer in two passes. First, get quotes for identical coverage from several companies and keep the three or four best prices. Then compare those finalists on what matters after a crash: financial strength, complaint record, claims satisfaction, how you can reach them and whether they offer the coverage options you need. The cheapest quote wins only if it holds up on the second pass.
Step 1: Shortlist on price for the same coverage
Prices for the same driver vary widely between insurers, so price is the right first filter, as long as the quotes are comparable.
- Pick your liability limits, uninsured motorist limits and deductibles before you shop.
- Get quotes from at least four or five insurers across channels: a direct insurer, a captive agent and an independent agent (captive agents vs independent agents vs buying direct).
- Check that each quote includes the same drivers, vehicles, coverages and add-ons, using the car insurance quote comparison worksheet.
- Keep the best three or four. A quote that is far below the others deserves a closer look at what is missing (what you give up with the cheapest car insurance policy).
Step 2: Check the finalists on five measures
| What to check | Where to find it | What good looks like |
|---|---|---|
| Financial strength | AM Best (and S&P, Moody's) | A- (Excellent) or better for most buyers |
| Complaints | NAIC complaint index via your state or NAIC's Consumer Insurance Search | At or below 1.00 for auto |
| Claims satisfaction | J.D. Power U.S. Auto Claims Satisfaction Study | At or above the study average |
| Shopping and service satisfaction | J.D. Power U.S. Auto Insurance Study (regional) | At or above your region's average |
| Coverage options | Insurer's website or agent | Offers the add-ons you want |
Financial strength
An AM Best rating is AM Best's opinion of an insurer's ability to pay claims. Ratings of A++ and A+ are Superior; A and A- are Excellent. Check the rating of the company that will issue your policy, which may be a subsidiary with a different name from the brand, and note the date. See AM Best financial strength ratings explained.
Complaint record
The NAIC complaint index compares an insurer's share of complaints with its share of premiums. A score of 1.00 is the national baseline; 2.00 means twice the expected complaints for a company of its size. Small insurers can show large swings from a handful of complaints, so look at several years. See The NAIC complaint index: how to look up an insurer.
Claims and service satisfaction
J.D. Power publishes two auto studies. The claims study surveys people who recently had a claim; in the J.D. Power 2025 U.S. Auto Claims Satisfaction Study, Erie Insurance ranked highest (743) and NJM Insurance second (731), against a study average of 700. USAA scored 741 but is not rank-eligible because its membership is restricted. The U.S. Auto Insurance Study ranks insurers by region, so a company can lead one region and trail another; in the 2026 study, for example, State Farm ranked highest in the Northwest, while Farmers Insurance placed second in Florida but last in New England and New York. See J.D. Power auto insurance studies explained.
Coverage options
Make a list of what you want beyond the basics, such as new-car replacement, accident forgiveness, OEM parts, rideshare coverage, gap coverage or a telematics discount, and confirm each finalist offers it in your state.
Step 3: Weigh the practical factors
- How you want to be served. Some people want a named local agent; others prefer an app. Check whether claims can be filed by app, online and by phone around the clock.
- Repair network. Many insurers run a direct repair program with guaranteed repairs. Find out whether you can still use your own shop (choosing a repair shop: direct repair programs and your rights).
- Telematics terms. If you are considering a telematics discount, read whether the program can raise your rate as well as lower it (telematics programs from the major insurers compared).
- Bundling. If you own a home, compare the bundled price and the separate prices; a bundle is not always cheaper (when bundling does not save money).
- Stability in your state. Insurers sometimes pull back from a state or product line. Farmers, for example, nonrenewed Farmers-branded auto, home and umbrella policies in Florida in 2023, and State Farm does not quote new auto business in Massachusetts or Rhode Island. A history of nonrenewal waves in your state is worth knowing.
- Eligibility limits. Some of the best-rated options are restricted: USAA to military members, veterans and families; AAA insurers to AAA members (AAA car insurance: how the clubs and their insurers work); Farm Bureau insurers often to Farm Bureau members (Farm Bureau insurance: membership, eligibility and how it works).
A worked example
Say three finalists quote the same coverage at $1,420, $1,480 and $1,610 a year (hypothetical figures). The cheapest has an A- rating but a complaint index well above 1.00 for three straight years and no app. The second is rated A+, has a complaint index below 1.00 and scores above average in the claims study. The third is similar to the second but costs $130 more. Many drivers would choose the second: $60 a year buys a materially better record on the measures that predict how a claim will go.
Red flags
- The seller cannot tell you which company issues the policy, or the company is not licensed in your state. Check with your state insurance department.
- No financial strength rating at all, with no explanation.
- A complaint index far above 1.00 year after year.
- Pressure to pay immediately by gift card, wire or payment app, a sign of a scam (how to spot a fake car insurance company).
Use our tools
The compare auto insurers side by side puts the ratings and details from our insurer profiles side by side. For a step-by-step guide to looking up licenses, ratings and complaints yourself, see how to research a car insurance company before you buy.
Key takeaways
- Shortlist insurers on price for identical coverage, then compare the finalists on quality.
- Check financial strength (AM Best), complaints (NAIC index) and claims satisfaction (J.D. Power) for each finalist.
- Ratings are dated and regional; check the current figures for the company and region that apply to you.
- Weigh service channel, repair options, telematics terms and the insurer's stability in your state.
- A slightly higher price for a markedly better claims and complaint record is often worth paying.