[Quora Research] Best insurance companies in USA

In practical terms, there neither is nor can there be a "best" auto insurance company. But I WILL make a recommendation at the end of this response.

Part of the problem is deciding just what "best" means. Cheapest? Pay claims quickly? Strong financials? Least number of policyholder complaints? Or what? Whatever your criteria, the answer tells you what the company is "best" for YOU.

Here some points to ponder:

One of the most important points is whether the company uses independent agents, or deals directly with the policyholder. The problem with "direct writers" is that their agents (called "captive" agents in the biz) are basically powerless to assist the policyholder when a dispute arises. The agent may make a great show of "being on your side," but the cookie just doesn't crumble that way. In fact, the best captive agents would rather be independent agents, IF they can find an agency whose skills and values match their own. The independent agent has a little more muscle with the company. If a company tightens up on underwriting or claims service, the independent agent can "move the book." This means switching (with the policyholder's approval, of course) ALL the insureds of one company to another company. On more than one occasion, this is exactly what I have done.

Whether the company is a direct writer, or relies on independents, the actual agent who handles your account is important. The agent for a direct writer generally has less incentive to be an expert on the subject, because the only thing they have to offer is what their company provides. The independent agent, by contrast, must be savvy about what a variety of companies offer and therefore has an incentive to understand the very subject of insurance, itself. You can, when talking with an agent of either type, discern something about their expertise, in the same way you develop an impression of anyone upon whom you rely for advice and service.

Don't be impressed by price. The insurance business -especially personal lines (auto, homeowner) is somewhat of a game, in which a company will seek to build a book quickly by offering prices they already know can't be sustained over time. Take Geico (please). They say you can save "up to 15%." But, compared to what? And you have already seen the advertising from companies who say something like, "of all those who switched to Auto Heaven Insurance, the average savings was over $350.00." But of course! We're only measuring those who switched. But what about those who requested a quote and did NOT switch? Give us that number.

Then there is Progressive, who seems fixated on the idea that insurance comes in cereal boxes sold by a comedian with greasy hair. They'll show you pricing from other companies, even if the premiums are LOWER. You BET they will, and that's because Progressive, like all other carriers, knows what kind of customers they want, and are happy to sluff off the ones they don't want to someone else. So, if they can't MAKE money, then at least they can make someone else LOSE money.

Price may also vary with coverage. Therefore it is important to be sure that quotes are "apples to apples." What are the apples? Just 3 things, basically: liability (usually required by law), physical damage to the vehicle (required by the lender if the car is financed) and coverage required by regulation (usually "no-fault" and "uninsured motorists"). Coverage is one thing, the AMOUNT of coverage is another. So, when soliciting quotes, be prepared to tell the agent EXACTLY what you want. But first, determine what it really IS that you want. In my opinion, the legally required minimums for liability insurance are way too low, thus asking for a quote on those limits makes no sense. Again, it is just my opinion, but the limit for liability insurance should be not less than the minimum required by the insurance company to support an "umbrella liability", policy, which adds a million (or much more) to the "underlying" coverage in the auto (and homeowners or renters) coverage. That number is probably 300 to 500 thousand per accident. Once you've determined the prudent limits, then ask for quotes based on those limits - certainly NOT on the legally required minimums. 

This all presumes you actually care about what happens when you have a claim; if you don't care, then simply start dialing for dollars, to find the cheapest deal THIS year - and do the same with every renewal.

Otherwise, a perfectly valid question to ask the agent is, "Over the past 3 or 4 years, how much have your premiums changed, and do you have any reason at all to think the price for your coverage will increase dramatically over the next 2 or 3 years?" See how they handle those questions; look for the "tells."

Here is what an "honest" answer will sound like: "The company I have recommended for you has increased its premiums at an average of roughly 5 to 8% over the past 3 or 4 years. This reflects the market cost of litigation and settlements arising from liability claims, and the cost of auto repairs. Both of these are rising at more than the over-all rate of inflation, but the increases are reasonably predictable. I have no reason to think this will change in the near future. I could be wrong, of course, but that's what the record has shown, so far." 

Here is what a dishonest answer will sound like: "We didn't get to be the fastest growing (most popular, etc.) insurance company by charging high prices. We deliver great product at a reasonable price and our reputation and number of policy holders are the evidence that we've been doing right by our customers."

With the above 2 examples in mind, see which way the needle moves when you chat with an agent.

So, who would I recommend for auto insurance? Although I represented many dozens of companies in my insurance career of nearly 25 years, I can't recommend any of them as "the best." The honor lies with someone else, but there is a catch. The company is USAA (usaa.com). I have encountered them numerous times in my career, as a competitor and as the organization which paid my damage claims against their policyholder. In every instance, I found them to be professional, expert, courteous and never contentious. The catch? You've got to be "military," or related to someone who is (or was). Their pricing is at least reasonable, and perhaps better. Your mileage will vary, of course, but if you have been or are in the armed services, or are an immediate family member of someone who is, or was, check them out