Best Budget Auto Insurance
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 2021 market share data. These companies collectively account for 88.5% of the market for private passenger auto insurance in the United States, according to the NAIC.
How we picked the insurers to evaluate:
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 2019-2021. 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 years.
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.
How we chose the winner:
- We ranked companies by their average rates for the minimum required coverage for a 2022 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 seven states where all widely available companies were represented. These seven states were Arizona, Illinois, Indiana, Kansas, Ohio, Tennessee and Wisconsin.
We then selected the insurer that most frequently had the cheapest average rate among the companies that met the "widely available" criteria.
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 provided by state insurance regulators to the NAIC.
How we verified our data:
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