Best Budget Auto Insurance
How we picked the insurers to evaluate:
NerdWallet started with a list of the nation’s 25 largest auto insurance companies (by premiums written), compiled by the National Association of Insurance Commissioners using 2020 market share data. These companies collectively account for 87.3% of the market for private passenger auto insurance in the United States, according to the NAIC.
Some of the providers are NerdWallet partners, but this did not influence our selection of the winner.
We narrowed the list to include only insurers that sell policies in a majority of states, that do not restrict availability based on membership criteria (such as military service) and for which pricing data was available for at least 20 states from Quadrant Information Services. Other, smaller companies that did not meet this data threshold may be cheaper for many consumers.
We also eliminated companies that received more complaints to state regulators than expected for 2018-2020. Complaints received by state insurance regulators are reported to the NAIC, which calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period.
How we chose the winner:
To determine which widely available insurer had the cheapest rates, we analyzed average rates within each state and Washington, D.C., for the minimum auto insurance coverage required by law within the state.
- We ranked companies by their average rates for minimum required coverage for a 2019 Toyota Camry L for a 35-year-old driver with no incidents on record and a credit-based insurance score considered “good” by each insurer.
- As a final check, we also averaged rates for this profile across the five states where all of the widely available companies were represented. These five states were Arizona, Illinois, Nevada, Oregon and Utah.
We then selected the insurer that most frequently had the cheapest average rate among the companies that met the "widely available" criteria.
How we verified our data:
NerdWallet gets insurance pricing data from Quadrant Information Services. Information about where insurers are available to consumers is verified through data supplied by insurance companies to the National Association of Insurance Commissioners. Information about complaints is verified through data supplied by state insurance regulators to the NAIC.