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Why You Can Trust the MarketWatch Guides Team
Here’s a breakdown of how we reviewed and rated the top auto insurance providers
130
Providers ReviewedOur team looked at over 100 of the top auto insurance providers in the U.S., from national providers like USAA, Travelers and State Farm to regional providers like Erie Insurance.
8,500
Data Points AnalyzedTo properly score each auto insurance provider, we looked at cost data, claims processes, customer review scores, industry standing, available discounts, coverages and add-ons.
800
Research HoursOur team put in the time so you don’t have to, evaluating cost data, reading customer reviews and researching companies to determine the most reliable options for coverage.
8,500
Customers SurveyedWe asked thousands of customers to describe their experience with their auto insurance provider to understand how real customers feel about their insurers.
Learn more about our methodology and editorial guidelines.
What Is Basic Car Insurance?
Basic car insurance is a policy that meets the minimum financial requirements of your state law. This coverage usually includes bodily injury liability and property damage liability. You’ll see your coverage represented in three numbers, such as 25/50/25. These numbers indicate the following:
- Bodily injury liability per person: Coverage for the medical expenses of one person in an accident
- Bodily injury liability per accident: The total amount your insurance company pays out per accident for medical expenses
- Property damage liability per accident: Covers the damages to property or another driver’s vehicle
Some policies also offer uninsured motorist coverage. If you’re involved in an accident with someone who doesn’t have insurance or the damages exceed their coverage amount, this covers your vehicle repairs and medical expenses.
Be mindful of the fact that liability insurance only covers injury and property damage expenses for other drivers and their passengers when you’re at fault for an accident. If you don’t have the cash on hand to repair or replace your vehicle or pay for unexpected medical expenses, you might want to consider full-coverage car insurance.
Standard Types of Car Insurance
There are six standard types of car insurance coverage that may be combined in a full-coverage policy. At its base, a full-coverage policy usually has liability, comprehensive and collision coverage. Depending on your needs or the state you live in, full coverage may also include uninsured/underinsured motorist coverage, personal injury protection (PIP) and medical payments coverage (MedPay).
You’ll pay a higher premium for full coverage than you would for basic car insurance. But you’ll also gain coverage that protects you, your passengers and your vehicle.
Liability Insurance
Liability insurance is the state-minimum required coverage. As its name implies, this insurance protects you when you’re liable to pay for property damage and medical bills resulting from an accident that’s your fault.
Liability coverage doesn’t pay for costs related to your or your passengers’ injuries or damage to your vehicle.
Collision Insurance
Collision insurance covers the costs of repairing or replacing your vehicle after a collision with another vehicle or object, no matter who’s at fault. If you’re involved in a serious accident and your car is totaled, your insurance carrier pays the actual cash value of your vehicle.
Along with accidents, collision insurance can cover instances of vehicle damage such as driving over potholes, running into a fence or flipping your vehicle.
Comprehensive Insurance
Comprehensive car insurance pay to repair or replace your vehicle after non-collision events that might cause vehicle damage, such as these:
- Theft
- Fire
- Falling objects
- Extreme weather events
- Accidents from running into large animals
If you need to replace your vehicle, your insurance carrier pays the actual cash value of your car, minus your deductible.
Underinsured/Uninsured Motorist Coverage
One in eight drivers are on the road without insurance, according to the Insurance Information Institute. If you’re involved in an accident with an uninsured vehicle and the other driver is found to be at fault, uninsured motorist coverage can pay your medical expenses and for damages to your vehicle.
In some cases, the at-fault driver is underinsured, meaning their coverage limits are too low to pay for your damage. When damages exceed the other driver’s coverage amounts, your underinsured motorist coverage kicks in.
PIP
Found mostly in no-fault states, PIP coverage pays for any medical expenses you or your passengers require after a car accident. It also covers funeral arrangements, lost income for survivors, essential services such as childcare and income from time you miss at work while you recover.
MedPay
MedPay covers medical bills and funeral costs for you and your passengers regardless of who’s at fault for an accident. If you have health insurance, MedPay can cover your deductible and copays for medical care after an accident.
State Car Insurance Requirements
Auto insurance coverage is mandatory in all but two states — New Hampshire and Virginia. You’ll need to meet the minimum coverage amounts required by your state. For example, California drivers must have a car insurance policy with a minimum of these liability limits:
- $15,000 in bodily injury liability per person
- $30,000 in bodily injury liability per accident
- $5,000 in property damage liability per accident
Below are each state’s minimum insurance requirements.
| State | Minimum-Coverage Requirements |
|---|---|
| Alabama | 25/50/25 |
| Alaska | 50/100/25 |
| Arizona | 25/50/15 |
| Arkansas | 25/50/25 |
| California | 15/30/5 |
| Colorado | 25/50/15 |
| Connecticut | 25/50/25, UM/UIM |
| Delaware | 25/50/10, 15/30 PIP |
| District of Columbia | 25/50/10, 25/50/5 UM |
| Florida | 10 PDL, 10 PIP |
| Georgia | 25/50/25 |
| Hawaii | 20/40/10, 10 PIP |
| Idaho | 25/50/15 |
| Illinois | 25/50/20, UMBI/UIMBI |
| Indiana | 25/50/25, UMBI |
| Iowa | 20/40/15 |
| Kansas | 25/50/25, UMBI/UIMBI, PIP: $4,500/person for medical expenses, $900/month for one year for disability/loss of income, $25/day for in-home services, $2,000 for funeral/burial/cremation, $4,500 for rehabilitation, survivor benefits of up to $900/month for one year for disability/loss of income and up to $25/day for one year for in-home services |
| Kentucky | 25/50/25 |
| Louisiana | 15/30/25 |
| Maine | 50/100/25 (or a combined single limit of 125), 50/100 UMBI/UIMBI, $2,000 MedPay |
| Maryland | 30/60/15, UM/UIM |
| Massachusetts | 20/40/5, UMBI, $8,000 PIP |
| Michigan | 20/40, $10,000 PD for damage in another state, $1 million in property protection insurance for damage in Michigan, PIP varies |
| Minnesota | 30/60/10, 25/50 UMBI/UIMBI, $40,000 PIP ($20,000 medical, $20,000 non-medical) |
| Mississippi | 25/50/25 |
| Missouri | 25/50/25, UMBI |
| Montana | 25/50/20 |
| Nebraska | 25/50/25, UMBI/UIMBI |
| Nevada | 25/50/20 |
| New Hampshire | 25/50/25* |
| New Jersey | 25/50/25, UM/UIM and $15,000 PIP for Standard policy or $5,000 PD and $15,000 PIP for Basic policy |
| New Mexico | 25/50/10 |
| New York | 25/50 BI not resulting in death, 50/100 BI resulting in death, UMBI, $10,000 PD, $50,000 PIP |
| North Carolina | 30/60/25, UM/UIM |
| North Dakota | 25/50/25, UMBI/UIMBI, $30,000 PIP |
| Ohio | 25/50/25 |
| Oklahoma | 25/50/25 |
| Oregon | 25/50/20, UMBI, $15,000 PIP |
| Pennsylvania | 15/30/5 (or a single limit of 35), $5,000 in first-party medical benefits |
| Rhode Island | 25/50/25 |
| South Carolina | 25/50/25, UM |
| South Dakota | 25/50/25, UMBI/UIMBI |
| Tennessee | 25/50/25 |
| Texas | 30/60/25 |
| Utah | 25/65/15 (or a single limit of 80), PIP: $3,000 per person for medical expenses, lesser of $250 per week or 85% of lost gross income for up to 52 weeks, up to $20 per day for household services for up to one year, $1,500 for funeral/burial/cremation costs, $3,000 death benefit |
| Vermont | 25/50/10, 50/100/10 UM |
| Virginia | 30/60/20*, UM (or $500 uninsured motor vehicle fee) |
| Washington | 25/50/10 |
| West Virginia | 25/50/25, UM |
| Wisconsin | 25/50/10, UMBI |
| Wyoming | 25/50/20 |
While these are the baseline amounts required by state law, you can add more coverage to your policy. Doing so can prevent you from having out-of-pocket expenses if the damages exceed your limits.
States Without Minimum Insurance Requirements
New Hampshire and Virginia are the two states that don’t require minimum coverage. In New Hampshire, drivers must show proof of financial responsibility of $25,000 for bodily injury per person, $50,000 bodily injury liability per accident and $25,000 for property damage per accident. If you don’t have money available to satisfy these limits, it makes sense to have liability insurance.
Virginia allows you to pay an uninsured motor vehicle fee of $500 in lieu of providing proof of insurance. While that might sound like a good way to avoid insurance costs, it can be risky. If you don’t have money to pay for property damage, medical bills and other expenses related to a car accident, you could face a lawsuit from the other party if you’re at fault.
When Do You Need More Than Basic Car Insurance?
There are several instances where it makes sense to have more than basic car insurance. If you’re leasing or financing your vehicle, your lender likely requires you to have full-coverage insurance.
You’ll often need to have lower deductibles (typically $1,000 or less) on comprehensive and collision insurance when you’re leasing or financing. A lender requires lower deductibles because it wants the vehicle in the best condition possible while you’re still making payments. If you’re involved in an accident, the lender assumes you’ll be better able to pay a lower deductible than a higher one.
Another reason to have full coverage is if your vehicle is 10 years old or less. Also consider a full-coverage auto insurance policy if you have a luxury vehicle or if you don’t have enough money on hand to repair or replace your vehicle after an accident or an act of nature. While your insurance premium is higher with full coverage, there are cheap providers that offer discounts to help offset some of the added expense.
Basic Car Insurance: The Bottom Line
Forty-eight states require you to have basic car insurance. It offers the minimum amount of coverage your state requires, which may include property damage and bodily injury liability coverage and medical coverage for you and your passengers.
However, if you lease or finance your vehicle or can’t cover the cost to repair or replace it, the policy limits of basic automobile insurance won’t satisfy your needs. In these instances, consider full-coverage options.
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Recommended Providers for Car Insurance
Whether you’ve decided on basic car insurance or want to get full coverage, shop around and compare car insurance from a few companies. We recommend starting with State Farm and USAA.
State Farm: Best Customer Experience
State Farm is the largest auto insurer in the nation and offers ample discounts for young drivers through its Steer Clear discount. If you’re under 25 years old and haven’t had any accidents or moving violations within the past three years, you could save on your insurance premium.
Through State Farm’s program, drivers can save up to 30% on their auto policies. The company also offers optional coverages such as rental car reimbursem*nt, emergency roadside assistance and ride-share insurance.
Read more: State Farm insurance review
USAA: Best for Military Members
USAA offers insurance to military members, veterans and their immediate family members. Through our research, we’ve found USAA to be among the most affordable car insurance providers. Along with basic car insurance, it offers options such as accident forgiveness and roadside assistance. If you enroll in USAA’s SafePilot program, you could save up to 30%.
Read more: USAA insurance review
Basic Car Insurance: FAQ
Below are frequently asked questions about basic car insurance:
The most basic insurance for a car is the minimum coverage allowed by state law. It typically covers property and bodily damage done to another driver and their passengers if you’re at fault for a car accident. However, it doesn’t cover damage done to your vehicle, and it won’t cover medical expenses for you or passengers unless you live in a state that requires PIP or MedPay.
The three main types of car insurance are liability, collision and comprehensive coverage. Liability coverage protects other drivers and their passengers when you’re at fault for an accident. Collision protects your car no matter who’s at fault for an accident, and comprehensive covers non-collision events such as vandalism and fire.
A deductible is the amount of money you must pay before your insurance company pays out for the claim. You’ll pay your auto insurance deductible (normally between $0 and $2,000) to the repair shop. Once your deductible is paid, your repair shop notifies your insurance provider, and your provider pays the rest.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at[email protected].
