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Can You Buy Travel Insurance for Road Trips?

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Table of Contents

How road trip insurance works

How to choose between road trip travel insurance companies, best plans for road trip travel insurance, other tips for road trip travel insurance, top cards with travel insurance for road trips, road trip travel insurance recapped.

There’s nothing quite like breezing down a highway with the windows down, the wind in your hair and a cooler full of sodas in the back seat. Whether you’re traveling alone or enjoying a road trip with friends or family, you’ll want to be sure that you’re covered with travel protections on your drive. This is as true whether you're embarking on a classic American road trip — like U.S. Route 66 — are or braving the roadways in a foreign country, in your own car or a rented vehicle.

Let’s take a look at road trip travel insurance, how it works and the best plans for auto travel insurance to suit your needs.

Road trips aren't immune to disruptions, and road trip insurance works similarly to travel insurance . Most plans require purchase before your trip begins and cover your prepaid expenses.

For rental cars

Not all third-party travel insurance policies automatically include coverage for a rental vehicle. Seek out plans that provide rental car insurance specifically — or book your car with a credit card that offers these specific protections .

Rental car travel insurance policies generally protect against damage to the rental vehicle only. Causes not within your control, such as collision, theft, vandalism, windstorm, fire, hail or flood damage are typically covered.

Because of the limited scope of rental car insurance, know that you may be on the hook if you’re liable for damage to other vehicles or if there’s bodily injury.

When picking up your rental car, you will likely be offered the insurance sold by the rental car company at the counter, typically called a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). You can decline this protection if you have sufficient coverage elsewhere (e.g., via a third-party policy or a credit card).

For your personal vehicle

Getting road trip insurance for your own vehicle isn't as common as travel insurance for rental cars , but it can still be a valuable consideration depending on your situation. For instance, access to roadside assistance can provide peace of mind if you are driving for long stretches in rural areas.

Finally, road tripping doesn’t end at driving a car. Other trip protections you may consider including in a travel insurance policy include medical evacuation, trip cancellation insurance, trip interruption coverage and accidental death and dismemberment (AD&D) insurance . This is true whether you opt to drive your own vehicle or rent one for your trip.

» Learn more: How to find the best travel insurance

With several travel insurance companies out there, it can be difficult to narrow down the one you really need. Before buying, always get quotes from multiple businesses.

This is because coverage levels and prices can vary dramatically. Insurance aggregators such as InsureMyTrip or Squaremouth (a NerdWallet partner) allow you to generate multiple quotes at once, plus they include filters for sorting so you can find the right policy for you.

Here are a few things to consider when looking for road trip insurance:

Whether you’re renting a car.

Where you're traveling.

Whether you already have car insurance. 

What types of coverage you’re interested in.

If you’re also planning on flying, cruising or using a ferry. 

How long you’ll be gone.

The cost of the plan.

To figure out the best road travel insurance, we combed a variety of insurance providers to check out their offerings.

Our quotes were built using a hypothetical 37-year-old from California taking a road trip throughout the United States. The total trip time was 15 days, and the total trip cost was $2,700. Here were the top contenders.

IMG’s iTravelInsured Travel SE plan came out significantly cheaper than competitors’ plans at just $100.43. This includes primary rental car coverage and a whole host of trip protections.

$40,000 in rental car coverage — $5,000 more than similar plans.

$250,000 in primary emergency medical coverage . 

Pre-existing conditions covered. 

Rental car coverage is only for collision, theft or damage to the vehicle.

$40,000 rental car coverage maximum. 

AD&D doesn’t cover strokes or any cardiac events.

HTH Worldwide

HTH Worldwide is another top option for travel insurance for car trips. Coming in at $185.29, the TripProtector Preferred plan provides up to $35,000 for rental car coverage, as well as other unique coverage options.

Covers additional kennel fees for your pet if you’re delayed. 

Includes $500,000 in primary emergency medical coverage.

Offers up to $200 to reinstate frequent traveler rewards, which is handy if you booked hotels on points for your trip.

Max of $35,000 in rental car coverage.

Repatriation of remains covers just $25,000.

Coverage excludes trucks, campers, motor bikes, recreational vehicles and exotic vehicles (defined as antique, limited production or collectible car or any other private passenger vehicle with a Manufacturer’s Suggested Retail Price over $75,000).

» Learn more: Is Cancel For Any Reason travel insurance worth it?

USI Affinity Travel Insurance Services

USI Affinity’s Diamond plan rang in at $187, just a little more than HTH Worldwide’s plan. While it includes rental car insurance, the limit is quite low, making this a better option for those who are driving their own vehicles.

Travel delay starting at six hours.

$1 million limit for medical evacuation and repatriation. 

$50,000 limit for 24-hour AD&D. 

$1,000 rental car insurance maximum.

$100 deductible for rental car insurance. 

Maximum trip length of 30 days. 

AXA Assistance USA

AXA Assistance USA is our final recommendation due to its nonmedical evacuation policy, which will transport you to safety during a natural disaster or time of political or civil unrest. This can be especially important if you plan on driving somewhere remote with unknown weather conditions. The total for AXA’s Gold plan came in at $215.

$50,000 in nonmedical evacuation. 

$35,000 in rental car coverage. 

Includes coverage for sporting equipment. 

Minimum 12-hour travel delay before benefits kick in.

$25,000 limit for 24-hour AD&D.

Max of $35,000 in rental car coverage. 

» Learn more: The best travel credit cards right now

We’ve gathered a few other tips for road trip travel insurance for you, so be sure to consider these before purchasing a policy:

Check out your own auto insurance policy. Within the U.S., your personal policy will usually also cover you when you drive a rental car.

Consider getting a travel credit card. Many travel credit cards include complimentary travel insurance as a benefit.

Secondary policies pay out after other options have been exhausted, but if you don’t have primary coverage, they automatically become primary. Keep this in mind when comparing plans. 

Waive the rental company's insurance and pay for your car with one these travel cards to get complimentary insurance on your rental and more:

on Chase's website

on American Express' website

• Primary rental car coverage: Up to the cash value of most rental vehicles.

• Trip delay: Up to $500 per ticket for delays more than 12 hours.

• Trip cancellation: Up to $10,000 per person and $20,000 per trip. Maximum benefit of $40,000 per 12-month period.

• Trip interruption: Up to $10,000 per person and $20,000 per trip. Maximum benefit of $40,000 per 12-month period.

• Primary rental car coverage: Up to $75,000.

• Trip delay: Up to $500 per ticket for delays more than 6 hours.

• Secondary rental car coverage: Up to $75,000.

• Trip delay: Up to $500 per trip for delays more than 6 hours.

• Trip cancellation: Up to $10,000 per trip. Maximum benefit of $20,000 per 12-month period.

• Trip interruption: Up to $10,000 per trip. Maximum benefit of $20,000 per 12-month period.

Terms apply.

It’s important to ensure that you’re covered when you’re traveling, whether that’s by airplane, trains or automobiles. Depending on where you’re going, you may already have coverage — but do your due diligence and check first.

If not, consider getting a travel insurance policy that’ll cover your road trip, both for peace of mind and safety when you’re away from home.

American Express travel insurance disclosures

Insurance Benefit: Car Rental Loss & Damage Insurance

Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply.

Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply.

Please visit americanexpress.com/benefitsguide for more details.

Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.

Insurance Benefit: Trip Delay Insurance

Up to $500 per Covered Trip that is delayed for more than 6 hours; and 2 claims per Eligible Card per 12 consecutive month period.

Underwritten by New Hampshire Insurance Company, an AIG Company.

Insurance Benefit: Trip Cancellation and Interruption Insurance

The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are some of the best travel credit cards of 2024 :

Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card

No annual fee: Wells Fargo Autograph℠ Card

Flat-rate travel rewards: Capital One Venture Rewards Credit Card

Bonus travel rewards and high-end perks: Chase Sapphire Reserve®

Luxury perks: The Platinum Card® from American Express

Business travelers: Ink Business Preferred® Credit Card

1x-10x Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases.

60,000 Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $900 toward travel when you redeem through Chase Travel℠.

1x-5x 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases.

60,000 Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.

1x-2x Earn 2X points on Southwest® purchases. Earn 2X points on local transit and commuting, including rideshare. Earn 2X points on internet, cable, and phone services, and select streaming. Earn 1X points on all other purchases.

50,000 Earn 50,000 bonus points after spending $1,000 on purchases in the first 3 months from account opening.

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Unveiling the Interconnected Tapestry: Exploring the Symbiotic Relationship of Tourism, Banking, Automobile Production, and Insurance

In our modern society, various industries play crucial roles in shaping our daily lives and the global economy. Among these, four industries stand out for their significant impact and interconnectedness: tourism, banking, automobile production, and insurance. Each industry plays a unique role, yet they are deeply intertwined, contributing to economic growth, societal development, and individual well-being. In this blog, we will explore the fascinating connections between these sectors and the ways they shape our world.

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Tourism: A Catalyst for Economic Growth and Cultural Exchange

The Ever-Expanding Tourism Industry: Boosting economies and creating jobs The tourism industry has witnessed remarkable growth in recent decades, becoming a key driver of economic development for many countries. With millions of travelers exploring new destinations each year, tourism brings in valuable revenue, stimulates local businesses, and generates employment opportunities. From hotels and restaurants to transportation services and souvenir shops, a wide range of businesses benefit from the influx of tourists, contributing to overall economic growth.

Exploring New Horizons: The role of tourism in promoting cultural exchange and fostering understanding Tourism acts as a bridge that connects people from different cultures and backgrounds. It provides opportunities for cultural exchange, allowing travelers to immerse themselves in local traditions, customs, and cuisines. By experiencing new cultures firsthand, tourists develop a deeper understanding and appreciation for diversity, fostering mutual respect and global understanding.

Sustainable Tourism: Balancing economic growth with environmental conservation As the tourism industry continues to expand, there is a growing need for sustainable practices to protect the environment and preserve cultural heritage. Governments, businesses, and travelers themselves are increasingly focused on minimizing the negative impacts of tourism, such as over-tourism, pollution, and habitat destruction. Sustainable tourism initiatives aim to strike a balance between economic growth and environmental conservation, ensuring that future generations can continue to enjoy the wonders of our planet.

Banking: Fueling Economic Activities and Financial Stability

The Backbone of the Economy: How banking supports businesses and individuals The banking sector serves as the financial backbone of any economy. Banks provide a wide range of financial services, including deposit accounts, loans, and investment opportunities. They play a crucial role in supporting businesses by providing capital for growth, facilitating transactions, and managing risks. Additionally, banks offer individuals various services like savings accounts, mortgages, and personal loans, empowering them to manage their finances effectively.

Innovation in Banking: Digital transformation and the rise of fintech The banking industry has experienced significant transformation with the advent of technology. Digital banking services, such as online and mobile banking, have revolutionized the way people access and manage their money. Furthermore, the rise of financial technology (fintech) has brought forth innovative solutions in areas like payments, lending, and personal finance management. Fintech startups and collaborations between traditional banks and tech companies are driving innovation, making financial services more convenient and accessible than ever before.

Ensuring Stability: The crucial role of banks in maintaining a healthy financial system Banks play a critical role in ensuring the stability and integrity of the financial system. They are subject to stringent regulations and supervision to safeguard against risks and maintain trust in the banking system. Banks act as intermediaries, channeling funds from savers to borrowers, while managing risks associated with lending and investing. Additionally, central banks work closely with commercial banks to implement monetary policies, control inflation, and maintain overall financial stability.

Automobile Production: Driving Progress and Mobility

Revolutionizing Transportation: The impact of automobiles on mobility and accessibility The automobile industry has transformed transportation, providing individuals and businesses with unprecedented mobility and convenience. Cars have become an integral part

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Q1: What is the impact of tourism on the economy? A1: Tourism has a significant impact on the economy by contributing to revenue generation, job creation, and infrastructure development in destinations. It stimulates various sectors such as hospitality, transportation, and retail, resulting in economic growth.

Q2: How does tourism promote cultural exchange? A2: Tourism facilitates cultural exchange by bringing people from different backgrounds together. Travelers can immerse themselves in local traditions, interact with residents, and experience diverse cultures firsthand. This interaction fosters understanding, tolerance, and appreciation for different customs and traditions.

Q3: What is sustainable tourism? A3: Sustainable tourism focuses on minimizing the negative environmental, social, and cultural impacts of travel while maximizing the benefits. It involves practices that conserve natural resources, respect local cultures, and promote the well-being of local communities for the long-term sustainability of tourism destinations.

Q1: What services do banks provide? A1: Banks offer a range of financial services, including savings and checking accounts, loans, mortgages, credit cards, investment products, and various types of insurance. They facilitate money transfers, manage transactions, and provide financial advice to individuals and businesses.

Q2: What is the role of banks in the economy? A2: Banks play a crucial role in the economy by facilitating the flow of funds, providing capital to businesses for expansion and investment, and offering financial services that enable individuals to manage their money effectively. They contribute to economic growth, stability, and financial inclusion.

Q3: How is technology transforming banking? A3: Technology has revolutionized banking through digital transformation and the rise of fintech. Online and mobile banking services provide convenient access to accounts and transactions, while fintech innovations have introduced new payment methods, lending platforms, and personal finance management tools.

Automobile Production:

Q1: How have automobiles changed transportation? A1: Automobiles have revolutionized transportation by providing individuals and businesses with efficient and convenient mobility. They have expanded personal and commercial travel options, improved accessibility to remote areas, and facilitated the movement of goods and services.

Q2: What are the benefits of electric vehicles (EVs)? A2: Electric vehicles offer several benefits, including reduced carbon emissions, improved air quality, and decreased reliance on fossil fuels. They contribute to environmental sustainability and are seen as a key solution for combating climate change and transitioning to a cleaner transportation system.

Q3: How does the automotive industry contribute to the economy? A3: The automotive industry has a significant economic impact, creating jobs in manufacturing, assembly, research and development, sales, and service sectors. It also drives technological advancements, attracts investments, and contributes to trade and export activities.

Q1: Why is insurance important? A1: Insurance provides financial protection against unforeseen events and risks. It offers peace of mind by covering potential losses related to health, life, property, liability, and other insurable risks. Insurance helps individuals and businesses manage and mitigate risks effectively.

Q2: What are the different types of insurance? A2: Insurance encompasses various types, including life insurance, health insurance, property insurance (e.g., home insurance, car insurance), liability insurance, and business insurance. Each type of insurance provides coverage for specific risks and circumstances.

Q3: What is insurtech? A3: Insurtech refers to the use of technology and digital innovation to transform the insurance industry. It includes advancements in areas such as online policy management, digital underwriting, claims processing, and personalized insurance offerings, enhancing efficiency and customer experience in the insurance sector.

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CXO perspectives: A conversation on the future of bancassurance

For many banks in Europe and Latin America, insurance is now “the need” to expand relationships with customers. Over the past few years, many bancassurance partnerships have successfully developed their positioning, reputations, and customer bases. Insurance fee income has gained relevance in light of a continued low-interest environment and, more recently, the outbreak of COVID-19, which heightened stress on credit products , such as consumer loans.

Our interview with industry leaders from BBVA and Crédit Agricole Assurances reinforces evidence of certain themes that are expected to shape the industry:

• Nonlife insurance and stand-alone sales are gaining relevance with banks, aiming to capture a broad share of customers’ wallets.
• New services are steadily being deployed to differentiate solutions for customers and to raise customer engagement.
• Banks are increasingly customizing insurance propositions to individual needs through the targeted use of public and banking data.
• Digital marketing and analytics tools are enabling a more scientific sales approach. Such an approach employs effective, personalized, data-driven leads across all channels, including the branch network and digital and remote channels, and allows banks to reach the “right” customers at the “right” moments with the “right” offers.
• Claims processes will increasingly leverage digital technologies to provide the best possible customer service, and technical excellence in the portfolio will indicate enhanced retention and pricing, with the latter becoming increasingly transparent in the digital shift.
• Operating models between bank and insurer need to adapt to a fast-changing environment that requires more frequent interactions and seamless coordination in an omnichannel approach. Partners are also accelerating the pace or facilitating innovation, including by offering seamless access to service providers directly through the banking channel.

For many banks in Europe and Latin America, insurance is now “the need” to expand relationships with customers.

These changes will not only challenge how banks and insurers integrate and work with one another on a bilateral basis but will also define the role they play in the larger picture as new direct and platform models likely emerge.

The following text is an edited transcript of McKinsey’s Bancassurance Forum 2021 Fireside Chats, which was held remotely in January 2021.

McKinsey: What’s your perspective on the current bancassurance environment?

Guillaume Oreckin biography

Guillaume has been the head of the international division of Crédit Agricole Assurances since 2017. Guillaume first joined Pacifica, the nonlife company of Crédit Agricole Assurance in France, in 2007 as deputy chief executive officer. He was previously a partner at KPMG Peat Marwick's insurance practice in Paris. He graduated from HEC Paris in 1987.

Crédit Agricole Assurances (CAA)

CAA generates a premium income of approximately €29 billion (70 percent of which comes from savings and retirement products) and manages around 30 million policies with 4,700 employees in eight European countries, as well as Japan. Aside from its captive network, it now serves more than 50 financial institutions outside of the Crédit Agricole Group retail networks.

CAA built its early success on distributing products through banks in domestic markets and subsequently extended its historical model to consumer finance and leasing domains, even outside the traditional banking model. This enabled the company to pursue noncaptive partnerships outside of France and grow internationally. As a result, it was able to generate additional value and create long-term partnerships or distribution agreements with nongroup banks.

Guillaume Oreckin: In the past five years, we saw rising interest in developing nonlife insurance, which can bring value to the franchise in addition to the financial domain. We believe there is no reason why the banking customer should get their insurance from somewhere else. This is a radical change. Previously, the idea was to define a penetration rate, and now the ambition is to move from one-off sales to capturing the full share of wallet and to say, “How can we show to every customer who is already banking with us that we are also the right partner to address their insurance needs?”

As far as life insurance is concerned, the trend is different. Recently, there has been a certain reluctance toward guaranteed savings products, for example, as well as a refocusing on portfolio quality instead of volumes. A lot of investment in our banking partners has been to help raise awareness among their customers that guaranteed savings is not the only way to save for the future. For example, customers are shown simulations to demonstrate how they could additionally benefit by using unit-linked solutions rather than guaranteed savings products. We want to democratize the access to wealth-management services, bringing enabling tools to our advisers and to regular customers—not only to affluent or private banking customers.

Jorge Matuk Chijner biography

Jorge is the insurance head of Banco Bilbao Vizcaya Argentaria (BBVA). He joined the company in 2000 as chief commercial officer of BBVA’s pension business in Peru and has subsequently held senior positions at BBVA in markets such as Bolivia, Chile, Colombia, the Dominican Republic, and Spain. He received a master’s degree in business administration from Universidad Católica de Santa María (Peru) and a master’s degree in law from Universidad Nacional de San Agustin de Arequipa (Peru), and he graduated from the strategy, marketing, and development business program at Wharton.

Banco Bilbao Vizcaya Argentaria (BBVA)

BBVA Insurance generates a premium income of approximately €5 billion and manages a portfolio of more than 13.5 million policies with around 1,100 employees across eight countries. Aside from its home market in Spain, BBVA serves customers in Turkey and in Latin American countries such as Argentina, Chile, Colombia, Mexico, Peru, Uruguay, and Venezuela.

BBVA’s bancassurance model aims to improve its clients’ financial health and help customers transition toward a sustainable future. BBVA’s model also pursues operational excellence on the banking side, working with the best, most engaged insurance teams and emphasizing data and technology.

Jorge Matuk Chijner: I agree with Guillaume on the dynamics between life and nonlife and the approach for value creation. In the current situation, we see an opportunity to accelerate change. Customers are clearly more active in digital channels, for research and contracting as well as for servicing. A recent survey shows that customers’ preference for digital sales in insurance increased from 38 percent before the pandemic to 44 percent after its onset. 1 According to McKinsey’s online survey conducted with more than 3,000 individuals during sessions in October 2019 and April 2020. In this environment, BBVA—and the industry in general—had to develop additional tools to meet these expectations. As part of our innovation efforts, we created an entirely new solution: a personal finance and expense-tracking application called Bconomy. This application allows customers to analyze all their expenditure data from different sources, such as credit cards or direct debits, as well as spending on insurance. Currently, all our 37 million digital customers have access to this solution. In this context, we determined that the key processes to enhance were not only for digital sales but also for other activities along the value chain, such as servicing, product modularization, and data usage.

McKinsey: How do you both see your ambitions and priorities evolving as we enter the next normal?

Guillaume Oreckin: Digital channels and the ability to distribute without the presence of the customer are becoming key. We have invested a lot in leveraging banking and insurance data to find patterns either for pricing or for commercial purposes. The data we hold are a key asset. As we increasingly diversify our business into nonlife, we believe that—apart from the insurance coverage—the services we can bring to our customers are also important. The role of banks is shifting toward value-added services and expanding from purely financial needs, focusing on addressing customers’ daily-life needs. Insurance is the entry point into the business of providing additional services to customers.

Today, we offer a lot of services at the moment of the claim—but tomorrow, we believe we can extend this to global service offerings along the customer life cycle. For example, in our branches in France, we sell home-surveillance cameras that are connected to a call center. The idea is to convey the message that we protect, we insure, and, if there is a problem, we will handle the claims. Furthermore, in the claims area, we are focused on providing services rather than merely writing checks. As an example, we created our own network of repairers for home insurance.

Jorge Matuk Chijner: We see a lot of changes in the market and in customer behaviors in terms of product preferences. Customers are showing greater sensitivity to health and life insurance, employment, and emerging risks such as cybersecurity. All these needs are emphasized by the pandemic, as well as other factors such as sustainability and climate change. We also see that the borders between life and nonlife businesses are becoming increasingly blurred, which represents an opportunity for BBVA to strengthen our value proposition.

In this space, we’ve seen interesting phenomena. In terms of the customer profile, there is an increasing propensity for younger people to buy insurance. There is also the expectation that customers will receive consistent experiences when they visit branches or use other channels—a true omnichannel approach. This means that customers can do things entirely on their own or via a contact center, but they can also start a journey in one channel and continue it in another. Our remote assistance app, Blue, helps in this respect, as it can provide a more specialized experience than a call center. We also offer video capabilities in Mexico to connect with customers.

In terms of data, banks have wide access, some of which can be transformed into insights for insurance companies, but we need new capabilities to do this. We recently introduced a new pricing model in Turkey based on banking data with the aim of creating specific pricing for clients who want auto insurance. We combine the banking and transactional data of customers and factor those numbers into a highly specific risk assessment. This is the value we can offer both customers and banks.

McKinsey: Both of you have mentioned the relevance of the digital shift. Guillaume, how is Crédit Agricole positioning its distribution channels to be successful?

Guillaume Oreckin: We are working on several aspects to face this challenge. First, products. We already had the idea that products in the bancassurance landscape should be very simple, but this is even more true in the digital space. The personalization aspect is not only in the price but also in the way we approach customers. A complex product is adapted neither to the branch nor to the digital channel. With this in mind, we moved to simple, prepackaged offers that can cover most of the cases but do not require a lot of explanations. We also reduced the number of questions asked to the customer materially. We can sometimes get the same information by using publicly available data or can use public data to predict responses to prefill a form. This also depends on the country, of course. France is quite advanced with regard to publicly published data.

Next, we are also working on the digital-acquisition side of the business, which has been quite tricky. We need to be fully aligned with the bank. We also need to define the right strategy to generate digital leads at sustainable acquisition costs. We are strengthening our teams to create joint business units with our banking partners that are dedicated to traffic generation and channel conversion. Operating separately doesn’t work—and it can even result in internal overbidding for the sole benefit of search engines. Customers also expect a lot regarding the services we can provide on the claims side. Most customers still expect human contact when making claims, but we also see a growing share of the population that prefers self-care. We need to invest a lot in that area.

McKinsey: Jorge, BBVA was one of the earliest players to recognize the significance of the digital shift. How do you foresee the insurance business repositioning to take advantage of the subsequent changes to the distribution model?

Jorge Matuk Chijner: We identified the fact that there is no trade-off between branches and digital growth. Our branches are advice centers for our customers. Customers buy insurance either through digital channels or physical branches but doing so at the branch enables us to provide a more qualified sales team to help them. The digital channel is not an enemy of the branches. There are complementary solutions for both sides: we share quotes with the branches and the digital channels, increase our accessible customer base, and have more satisfied customers. For example, customers who start the journey online can later be contacted by phone—or vice versa. This allows the bank to follow up on leads using both offline and digital tools.

We are addressing this topic across our important partnership agreements. In Spain, we partnered with Allianz for nonlife and Bupa for health. We also have partnerships with Vitality in Mexico and Rimac in Peru. The products are similar in terms of suitability for digital channels and branches, but we have different approaches depending on customer preference. For example, we are working on contextual insurance in Spain—particularly travel insurance—which had a nearly double-digit conversion rate before the pandemic (such as when a ticket for a flight is purchased on a credit card or a customer orders foreign exchange). The branches can always advise customers on traditional products. However, as we create new products, digital channels become increasingly important support to complement the branches.

Would you like to learn more about our Financial Services Practice ?

In terms of partnerships, we work with Bupa in Spain on telemedicine and on health prevention—for example, by adding some features directly to our app and by providing a seamless transition into Bupa’s app without the need for the customer to log in again. In Mexico, we work with Vitality on life insurance, particularly when customers change life stages or adjust their types of insurance. Part of this is knowing our customer base and recognizing the opportunity to grow—for instance, working with Telefonica in Spain and leveraging our mobile app in Xiaomi mobile phones.

McKinsey: Continuing with this topic of change, what elements of innovation around product offerings are you observing, and will those be important in your strategies moving forward?

Guillaume Oreckin: I strongly believe that innovation will be in the services we can offer customers. That’s why we created a joint venture with Europ Assistance. We did not have our own assistance arm, and strategically, we thought that was a mistake. Many innovations from the past ten or 15 years came through assistance and services, either because we extended their use or because new services became necessary.

If you take, for example, auto or home insurance, it is not so easy to differentiate the offering from competitors; it has not changed much. Where you can make the difference is in the services you provide and in the way you handle claims. One element is also in the way you support the banks: the tools you give to the bank networks, either in the digital, call-center, or physical channel. We have invested a lot in giving our banking partners the best possible tools to approach customers’ needs and give the right advice at the right moment.

Jorge Matuk Chijner: We are strong believers in continuous innovation. We are always seeking to define what is important in terms of knowledge all along the value chain, including claims handling, policy servicing, and data management. In our case, we have focused our innovation efforts on claims, which is the moment of truth in insurance. Good operators can help banks save money in addition to ensuring the best possible customer experience.

We recently partnered with Bdeo, a start-up in Mexico that provides technology for remote claims verification in our auto insurance products. We’re also working closely with Allianz’s corporate venture capital fund to spur innovation and enable access to a larger insurance ecosystem. Finally, we’re working with Bupa on medical expenses. All that said, innovation is a trial-and-error process, often spanning multiple countries. You need to choose where the priorities are. In our case, it was claims.

McKinsey: Finally, Guillaume, what is your perspective on the threat of direct players to bancassurance?

Guillaume Oreckin: Banks can bring the best of both worlds, and direct is not an unknown attacker to us. We already sell a lot of insurance through bank websites, which are among those that have the strongest traffic. This is a strong advantage for us. The value of the brand also makes me optimistic. At one time, we thought the brand would lose value on the internet because many new brands would appear. That has not been the case. If anything, a strongly established brand is still an incredibly important asset, and it is much easier to build on the value of a brand such as BBVA or Crédit Agricole than to have a brand that is not as well established. Many people will try to enter the direct market, but few will succeed in establishing a strong brand.

Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey & Company or have its endorsement.

This article represents edited comments from the Global Bancassurance Forum 2021 CXO interviews, which were hosted on January 28, 2021, by Bruno Dinis , a partner, and Rui Neves , a senior partner, in McKinsey’s Lisbon office; Florian Fuchs , a consultant in the Munich office; and Francesco Passera , an associate partner in the Milan office.

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Business Automobile Policy (BAP): What it is, How it Works

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

Investopedia / Jessica Olah

What Is a Business Automobile Policy (BAP)?

A business automobile policy (BAP) provides coverage for a company's use of cars, trucks, vans, and other vehicles in the course of carrying out its business. Coverage may include vehicles owned or leased by the company, hired by the company, or employee-owned vehicles used for business purposes. It might also be a requirement of the vehicle loan . A BAP covers both liability and damage. A business automobile policy is also known as a business auto coverage form  (BACF).

Key Takeaways

• A business automobile policy provides (BAP) insurance coverage for a company's use of cars, trucks, vans, and other vehicles used in the course of its business.
• The coverage under a BAP applies to either vehicles owned or leased by the company, hired by the company, or employee-owned vehicles used in the course of business.
• Additional coverage a company can purchase in conjunction with a business automobile policy (BAP) includes collision coverage, comprehensive coverage, specified perils coverage, and other liability coverage.
• A business automobile policy (BAP) is also known as a business auto coverage form (BACF).

Understanding a Business Automobile Policy (BAP)

A business automobile policy provides coverage for any company use vehicle which drives on public roads. BAP coverage is chosen individually for each vehicle insured, and different transports owned by the same company may carry different amounts and types of coverage.

Businesses should get a business automobile policy even if they do not own vehicles if at any time they may use personal vehicles for business purposes. This coverage is vital in the cases of employees who use their private cars for conducting business duties. In the situation of a severe accident, the employee may not have enough liability coverage to protect the business adequately.

Agents will use the business auto coverage form to create the policy for the business owner. A business coverage policy will identify the number and type of vehicle insured, the causes of and types of damage covered, and the obligations of the insurance provider and the business. 

BAPs cover injuries or property damage sustained in any vehicular accident as well as any costs associated with repairing the damage to the vehicle. Managers should not rely on personal auto insurance as those typically do not cover any damages done in the course of business.

The BAP usually consists of five sections, which are (1) covered autos, (2) liability coverage, (3) physical damage coverage, (4) business auto conditions, and (5) business definitions.

Policyholders should pay careful attention to the numerical symbols listed in the policy declarations, which indicate the autos insured for each various coverage. These symbols, called covered auto designation symbols, are denoted by a number. Each symbol represents a category of covered autos. For instance, symbol 1 means "any auto," while symbol 2 means "owned autos only."

Coverage Available in Business Automobile Policies (BAPs)

BAP coverage should include both property damage and liability insurance. Also, in cases where the vehicle is a lease, or the company is making regular payments, specific levels of coverage may be necessary.

• Collision coverage  can be bought only in conjunction with liability and comprehensive coverage. This provision reimburses the insured for damage sustained to the automobile due to the fault of the insured business driver. It does not cover damage due to theft or vandalism, and also does not cover damage paid from another at-fault driver's policy
• Comprehensive coverage  includes damage to the car from causes other than a collision. The loss may come from many sources and include acts of nature such as a tornado, dents from a run-in with a deer, vandalism and theft damage, and other causes. 
• Specified perils coverage  provides coverage on losses incurred to your property from hazards or events named on the policy. The  burden of proof  falls on the insured who must demonstrate through facts and evidence that a claim is valid.
• Liability coverage  gives protection against claims resulting from injuries and damage to people and property. Most state laws require drivers to carry liability insurance. Liability insurance has no deductible, so a driver can choose different deductibles based on perceived risk levels. If a driver is found guilty of reckless driving or driving impaired, a court may award punitive damages, and in some states, a BAP or BACF is not legally allowed to cover punitive damages.

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5 types of tour guide insurance all tour operator businesses need

By Aurelio Maglione — 8 Aug 2024

As a tour operator, you face risks on a daily basis that go beyond typical business challenges. Whether you’re running sightseeing tours in Sydney, 4WD tours in the Outback or kayaking adventures along the coast, it’s vital to protect your company with specialized insurance.

For example, what happens if you have to cancel tours due to bad weather, natural disasters, or insufficient bookings? Or if a client suffers a personal injury during your tour? While these situations vary in frequency, the potential financial damages are always significant. Fortunately, there are a number of insurance solutions available to help protect tour operators against these risks.

Using Bob’s Hypothetical Kayaking Tours as an example, let’s explore the 5 most important types of insurance your tour operator business needs, along with some additional considerations for the Australian market.

1. Asset and revenue insurance

The specifics of this coverage will depend on your tour or activity type, but you’ll need to consider all areas:

• Protection against breakdown and damage to business assets (e.g. fire, burglary, general property, equipment breakdown). Keep in mind that all Australian businesses are required to insure company vehicles for third party liability . Without insurance, your equipment and property investments are at considerable risk. Pro tip: check your state or federal legislation to see what’s required by law!
• Business interruption coverage (for any interruption that stops the business from generating revenue). This includes interruptions due to a key person’s illness or bad weather.

If Bob’s Kayaking office caught fire, destroying nearly everything, he’d lose money on canceled bookings, still need to pay rent and staff wages, and cover other regular expenses. A claim on asset & revenue insurance would cover these business expenses during the period they’re unable to operate due to an insurable loss.

2. Public liability insurance

Let’s say Bob can’t catch a break and one of his tour participants loses their cell phone, laptop, jewelry and glasses while having the time of their lives on his exhilarating kayaking adventures. Bob’s liability insurance will relieve him of any responsibility to replace the stolen/lost items.

While liability insurance is expensive (standard coverage is often $10 million), most travel agents won’t resell your tour without it. Remember, if you work with third party contractors, make sure they have their own liability insurance as well.

3. Workers compensation insurance

Bob can’t run his kayak operation by himself! He needs accountants to handle his financials, guides to lead the tours, and maintenance staff to take care of the kayaks. Many tours like Bob’s involve a lot of physical activity on a daily basis. Even employees who work in the Bob’s Kayaking office can trip on a cord and get hurt.

Workers compensation insurance protects your business against costly claims resulting from workplace accidents or illnesses. It’s mandatory for all employees of a Pty Ltd company in Australia, including company directors and business owners.

For sole traders or partnerships, business owners aren’t covered by workers’ compensation. In these cases, you should consider income protection insurance to avoid losing revenue while recovering from an accident or illness.

4. Commercial crime insurance

As much as Bob values all of his staff and employees, sometimes there’s going to be a bad egg. This may come as a shock, but employee theft and misconduct are more common than you might think. According to a report published by Embroker, a staggering 75% of employees admit to stealing from their company at least once . It is for this reason that Bob should have commercial crime insurance as one of his tour operator insurances.

In the event of theft or misconduct by one of Bob’s employees, commercial crime insurance will cover all losses. This could include missing assets or money misspent on non-work related purchases.

5. Errors and omissions insurance

Running a kayak business is very demanding, and Bob deals with a wide variety of customers every day. Making mistakes is inevitable, but certain hiccups can cause serious damage and ruin Bob’s business reputation. Not only that, but identifying and correcting a mistake takes a lot of time that could be better spent elsewhere.

Errors & omissions insurance (E&O) will protect Bob’s business from claims that may arise due to mistakes or failure to meet certain criteria of a signed contract. E&O insurance also protects Bob from any settlements or additional costs related to the errors that may occur. This coverage is often required and highly recommended to protect your tour operator business from inevitable human errors.

Additional considerations for Australian tour operators

While the above five types form the core of a solid insurance package, savvy Australian tour operators should also consider:

Professional indemnity insurance

Often bundled with public liability insurance, this covers legal fees and settlements arising from providing incorrect advice or information. For example, if Bob gives inaccurate information about a kayaking route’s difficulty, leading to an unprepared guest, this insurance would cover potential legal consequences.

Vehicle and transport insurance

For tour operators who transport passengers by bus, boat or 4WD, specialized vehicle insurance is essential. It goes beyond standard car insurance to cover the unique risks associated with transporting passengers for commercial purposes. This is particularly important for operators running sightseeing tours in remote areas of Australia.

Cyber liability insurance

In an age where bookings and customer data are increasingly digital, cyber liability insurance protects against data breaches and cyber attacks. This is increasingly important for tour operators and other travel industry professionals who rely on online booking systems and store customer information digitally.

Product liability insurance

If you sell or rent equipment as part of your tours, product liability insurance covers you against claims for injury or damage caused by products you’ve supplied. This could be particularly relevant for operators offering activities such as kayaking, snorkeling or hiking where equipment is provided.

Where to look for tourism insurance

With the types of tour operator insurance covered above, it’s important to do your research prior to signing up with an insurance company. Without the right level of cover, you may be out of pocket after a claim. So it’s critical that you choose the correct tour operator insurance plan and an insurance company that fits well with your tour operator business.

You can begin your search by:

• Get quotes from insurance brokers specialized in tourism industry coverage.
• Ask for recommendations from other tour operators or local tourism organizations.
• Considering working with an insurance broker who understands the unique needs of tour operators and can help tailor a policy to your specific business model.

Once you’ve gathered this information, pick your top three companies from the list and compare their offerings. It’s important to find a policy that’s right for your business, so make sure to do proper research and shop around instead of jumping signing up with the first tour operator insurance company you see.

Whether you’re a small business just starting out or an established travel company, the right insurance coverage gives you the confidence to deliver amazing experiences without constant worry. It allows you to focus on creating unforgettable adventures for your guests, knowing that you’re protected against various risks.

If you found this article on essential tour operator insurance helpful, follow the Rezdy blog for more insights into running a successful travel business. There are numerous marketing tools and resources designed with businesses like yours in mind.

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Insurance, tourism

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An insurance contract is a risk-transfer mechanism between an entity exposed to potential risks (the insured) and another that compensates the losses originated by such risks (the insurer). It promises an economic compensation in case a specific future loss occurs in exchange of premium payments fixed in advance. According to the risks covered, insurance contracts may be classified in two types: life insurance covers the risks related to the insured in terms of illness, accident, retirement income, and death, whereas property insurance covers the risks related to a property in the instance of fire, flood, and earthquake. Dionne ( 2013 ) collects the scientific foundations of risk and insurance economics.

The origin of insurance is traced back to the third millennium BC by Babylonian traders who looked to reduce their losses. The earliest contract that is known covered a ship traveling from Genoa to Majorca in 1347. In the nineteenth century, some government institutions and insurance...

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APEC 2006 Tourism Risk Management: An Authoritative Guide to Managing Crises in Tourism. APEC: International Centre for Sustainable Tourism.

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Bank, M., and R. Wiesner 2011 Determinants of Weather Derivatives Usage in the Austrian Winter Tourism Industry. Tourism Management 32:62-68.

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Becken, S., and K. Hughey 2013 Linking Tourism into Emergency Management Structures to Enhance Disaster Risk Reduction. Tourism Management 36:77-85.

Dionne, G. 2013 Handbook of Insurance (2nd ed.). New York: Springer.

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Jafar Jafari

School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong, Hong Kong SAR

Honggen Xiao

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Monter, R. (2014). Insurance, tourism. In: Jafari, J., Xiao, H. (eds) Encyclopedia of Tourism. Springer, Cham. https://doi.org/10.1007/978-3-319-01669-6_111-1

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Ingemar Dierickx

Negotiation Expertise

Three decades of experience

Ingemar Dierickx holds a PhD (Business Economics) from Harvard University and an MBA from the Harvard Business School, where he was a Baker Scholar. He also holds law degrees from the Harvard Law School (LL.M.) and the Rijksuniversiteit Gent (Lic.Jur.)

For nearly 25 years, he was Professor of Negotiation Analysis at INSEAD. Previously, he worked as a Research Associate with Professor Ray Goldberg at the Harvard Business School and with Professor Thomas Schelling, Harvard Economics Department.

His research on Negotiation Analysis and into the microeconomic foundations of Strategy has been widely published in scientific journals such as Management Science, Journal of Business, Strategic Management Journal, International Journal of Industrial Organization, and European Economic Review. As an outstanding teacher he received numerous awards, including a special Lifetime Achievement Award for teaching excellence. He created INSEAD’s executive program on Negotiation Dynamics and was its Director for fifteen years.

After joining The Moscow School of Management (Skolkovo), he became a founding partner of  D&AC – Negotiation Advisors , a company that offers a wide range of negotiation support services. With Professor Luis Almeida Costa, he developed  Negotiation Dynamics – The Game™ , a state-of-the-art simulation that tracks repeated negotiations within ongoing business relationships. He has also produced a highly successful training DVD on Price Negotiations.

For nearly three decades, Ingemar Dierickx has represented and advised high net worth individuals and corporate clients in a broad spectrum of industries including banking, insurance and re-insurance, consulting, accounting, legal services, travel, aerospace, the automobile industry, retailing, oil and gas, mining and metals, power generation, the pharmaceutical industry, telecommunications, television and entertainment, software development, commodity and specialty chemicals, as well as the public sector.

As a trainer and coach, he has run hundreds of highly successful negotiation workshops around the world.

Experts say travel insurance is crucial: Here's how it actually works

Whether illness or weather derails plans, policies can cover a range of issues.

Whether you're a frequent traveler or setting plans for an upcoming vacation, unexpected circumstances such as bad weather can cast a cloud over a trip, which is why experts suggest investing in travel insurance.

Recently, Hurricane Beryl marked an "early and violent start" to the typical storm season. NOAA Administrator Rick Spinrad confirmed in a mid-season update earlier this month that Beryl was "the earliest category-5 Atlantic hurricane on record" -- and peak storm season is right around the corner.

With increased risk of disruptions during hurricane season through November and more people opting for shoulder season getaways after avoiding summer crowds , travelers should prepare for such worse-case scenarios to avoid losing money on hotels, activities and other bookings.

Everything you need to know about travel insurance

With an array of options in the market and various individual reasons to invest in a plan that protects your purchases, "Good Morning America" tapped top industry experts to provide insights to help ensure that even if your next getaway gets rained out, your bank account won't be drained as well.

"Things can go wrong in ways that you can't begin to imagine. And if you're unlucky and unfortunate enough to be in that position, you don't want to come back from your trip with a debt to pay off as well," Daniel Green, trip insurance expert and co-founder of Faye Travel Insurance, told "GMA."

Understand the basics before you buy bespoke coverage

Katy Nastro, spokesperson for Going.com, formerly known as Scott's Cheap Flights, told "GMA" that first and foremost, folks need to "understand all the ways in which you are already protected before dishing out for things you don't need."

"When it comes to flight insurance, under federal law, you are already protected to get a full refund or rebooked on a significantly delayed flight or cancellation, regardless of the reason," she said. "With new regulations that airlines must comply with by the end of October, seeing your refund back to your payment method will get a lot faster and more seamless."

Nastro said "many travel credit cards already have built-in trip insurance that can protect you when the unexpected happens," citing perks from the Chase Sapphire Reserve card that provide "reimbursements up to $10,000 per person for pre-paid, non-refundable travel expenses when an interruption happens."

You should always buy insurance for one simple reason -- when you start thinking -- 'I hope we have insurance,' it's one minute too late

"These cards often pay sooner than the airlines do for expenses due to misplaced bags," she added.

Nastro also suggested to check on coverage across state lines with any existing medical or car insurance policies, which could help cut down on costs.

"Specifically, when it comes to medical insurance, medical care around the world is generally a fraction of the cost compared to what it is in the U.S. So, while it could be good to have if you need stitches in Vietnam, it probably won't break the bank," she said.

Because travel insurance is subjective, Nastro said "it's worth considering when you exhaust your existing coverages to see where you might have some gaps."

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"A great example is when you have a trip with multiple components that aren't purchased together, like a flight and cruise," Nastro told "GMA." "The cruise won't wait when your flight has been rebooked for the next day, so in this scenario, it might be worth looking at insurance on the cruise portion. You can typically add insurance after the fact, but reading the fine print is critical."

"Trip or travel insurance tends to be cheaper to buy, but is restricted to what is actually covered and often has red tape in terms of getting that reimbursement. For example, if you have an illness and need to cancel your trip, policies might require a doctor's note," she continued.

She added, "Travel insurance with 'cancel for any reason' policies tends to be more expensive to purchase, but more inclusive in terms of what is considered a 'covered' reason. The biggest caveat is that they offer a partial refund -- 50% to 75% of nonrefundable expenses."

When it comes to weather, she reiterated that reading the fine print is critical, because "the coverage typically offered is for extreme weather and scenarios where the operator cannot operate for 24 hours or more, so a typical summer thunderstorm won't make the cut."

Green added that, generally, if a customer buys travel insurance from an airline provider, since the carrier "doesn't know all the details of your trip" beyond the price and date of the flight, "if you're renting a car and traveling around -- or staying in a $4,000 hotel, you might only have $1,000 worth of insurance because at the checkout screen of American or United or Delta, they just didn't know about those costs."

"That's why I think it makes a lot more sense to buy insurance directly from either a website portal or an agent that can show you the main limits, so you know all the things you spent are covered as part of the policy," he said.

As Nastro pointed out, payment for claims can become a sticky situation, which is why Green helped craft an more seamless way to alleviate issues by providing the reassurance of immediate reimbursement: "If you have Apple Pay or Google Pay, you can access that money instantly after the claim is settled," he told "GMA."

What is shoulder season? Experts tips to save on airfare, hotels in opposite seasons

Green co-founded Faye just before the COVID-19 pandemic sent the travel industry into a tailspin, but said now, "the concern on the American mind more than anything is who's gonna pay for this? Especially in these days of inflation, if you're paying significant amounts of money for travel, and something goes wrong, you'd like to at least be made whole."

3 categories to consider for travel insurance coverage

Green explained that travel insurance can generally be broken into three categories: your investment in the trip, your belongings such as luggage and passports, and your health.

For anyone booking travel on their own, without a travel agent or adviser, Green highlighted the difference between buying travel insurance directly versus clicking "yes" on an app or checkout screen.

"You're not always being offered insurance that's in your best interest if you're just hoping that whatever your credit card comes with, or whatever your airline gives you at the end of the checkout is going to provide everything you need," he said.

He noted that one important tip for any type of travel coverage purchase is "the earlier you tell your insurance company that something has gone wrong, the more likely it is that they can help you while you're on your trip -- and helping sometimes means paying for expenses so that you don't have to be out of pocket and get reimbursement."

Weather-specific products for travel inconveniences

Products like Sensible Weather offer more specific elements to cover scenarios such as rain during a beach vacation or lack of snow for a ski trip, which may derail plans.

"The idea of travel inconvenience payments, it just takes the sting out of things," Green said. "In those scenarios, you just get a fixed, agreed amount of money -- sort of no questions asked -- You just have to prove that you actually experienced the loss in question, and then you get the full amount."

"You should always buy insurance for one simple reason -- because usually at the point when you start thinking to yourself, 'Wow, I hope we have insurance,' it's one minute too late," Green said. "Hurricane season is the perfect example of that. Once a hurricane is named, you generally can't make any claims related to the hurricane if you didn't already buy a policy."

"What we're learning about the current hurricane season is the weather is becoming unpredictable all the time," Green said. "We've heard about days where the weather was so hot in Phoenix that airplanes couldn't take off from the tarmac, hurricanes coming sooner than expected, or power failures causing an airport to not be able to operate -- and because those things are so unpredictable, playing the game of wait and see before buying your insurance rarely make sense versus justbuying it around the time you buy your trip and not having to worry about that aspect again."

How much plans cost and limitations

"There is no one size fits all when it comes to travel insurance," Green noted.

However, he said "there are rules of thumb" that industry experts often follow: "You should be willing to spend up to 10% of the cost of your trip on your insurance."

"The two biggest factors that usually affect the cost of your insurance is your age at the time of purchase, not at the time of travel, and the value of your trip," he said, adding that "every company is different."

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Automobile Insurance in the US - Market Research Report (2014-2029)

Past 5-Year Growth

Automobile insurance in the us industry analysis.

The Automobile Insurance industry provides individuals and businesses with various lines of insurance needed to operate an automobile legally and invests a portion of underwritten premiums in financial instruments. The industry has experienced rising premium prices as operators have contended with higher claims volumes because of renewed traffic activity and higher costs to repair or replace a vehicle. Despite premium growth during most of the period, dropping consumer confidence and investment income in 2020 because of the pandemic pressured insurance providers. Overall, revenue has been falling at a CAGR of 0.5% to $364.9 billion over the past five years, including an expected jump of 0.8% in 2024.

Trends and Insights

Operators seek to gain online dominance. Insurers operating online can invest heavily in marketing campaigns and reduce spending on wages for sale.

Investment activities are one way insurance operators generate revenue. As interest rates rise, yields for fixed-income securities also jump.

• The distribution of establishments closely follows domestic population trends, particularly urbanization trends. Providers charge higher premiums in locations with more cars on the road because this increases the likelihood of accidents.

Price is the primary form of competition in the industry. The price of automobile insurance represents the value perceptions of consumers and businesses.

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Industry Overview

Table of contents, methodology, market size and recent performance (2014-2029).

Industry revenue has declined at a CAGR of 0.5 % over the past five years, to reach an estimated $364.9bn in 2024.

Renewals and periods of market cycles play a part in the industry

• Automobile insurers encounter stable demand, as private and commercial vehicles require insurance regardless of market conditions. As a result, the industry does not encounter large swings in either direction due to the steady demand for automobile insurance.
• Additional trends and insights available with purchase

Industry outlook (2024-2029)

Market size is projected to grow over the next five years.

Motor vehicle registrations are set to jump

• Operators are expected to benefit from a rising number of motor vehicle registrations over the next five years. A climb in motor vehicle registrations will drive demand for automobile insurance.

Biggest companies in the Automobile Insurance in the US

To view the market share and analysis for all 4 top companies in this industry, view purchase options.

Products & Services Segmentation

Industry revenue is measured across several distinct product and services lines, including Personal liability insurance, Personal collision/comprehensive insurance and Commercial liability insurance. Personal liability insurance is the largest segment of the Automobile Insurance in the US.

Personal and commercial liability insurance declined slightly caused by reduced travel during the pandemic

• Liability insurance products offered to downstream consumers and corporate customers account for the most significant portion of revenue for the automobile insurance industry.
• More insights available in the full report

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Widen you competitive advantage with related industries

Competitors.

• Property, Casualty and Direct Insurance in the US

Complementors

• Life Insurance & Annuities in the US
• Health & Medical Insurance in the US
• Reinsurance Carriers in the US

International industries

• Global Direct General Insurance Carriers
• Property, Casualty and Direct Insurance in Canada
• General Insurance in Australia
• General Insurance in New Zealand
• General Insurance in the UK

View all industries in United States

About this industry

Industry definition.

This industry underwrites or assumes the risk and assigns premiums for auto insurance policies. Car insurance provides financial protection against physical damage to automobiles and bodily injuries resulting from traffic incidents. Automobile insurance can also protect against resulting liability.

What's included in this industry?

Purchase this report to view all 4 major companies in this industry.

Related Terms

Industry code.

NAICS 52412 - Automobile Insurance in the US

Performance

Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.

Analyst insights

In this chapter (4).

• Current Performance

Key metrics

• Annual Revenue, Recent Growth, Forecast, Revenue Volatility
• Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
• Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
• Total Profit, Profit Margin, Profit per Business
• Revenue, including historical (2014-2023) and forecast (2024-2029)
• Employees, including historical (2014-2023) and forecast (2024-2029)
• Businesses, including historical (2014-2023) and forecast (2024-2029)
• Profit, including historical (2014-2024)
• Industry Volatility vs. Revenue Growth
• Industry Life Cycle

Detailed analysis

• Trends in supply, demand and current events that are driving current industry performance
• Expected trends, economic factors and ongoing events that drive the industry's outlook
• Key success factors for businesses to overcome volatility
• How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.

Products and Markets

Learn about an industry's products and services, markets and trends in international trade.

Analyst insight

In this chapter.

• Products & Services
• Major Markets
• Largest market segment and value in 2024
• Product innovation level
• Products & services segmentation in 2024
• Major market segmentation in 2024
• Trends impacting the recent performance of the industry's various segments
• Innovations in the industry's product or service offering, specialization or delivery method
• Key factors that successful businesses consider in their offerings
• Buying segments and key trends influencing demand for industry products and services

Geographic Breakdown

Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.

The distribution of establishments closely follows domestic population trends, particularly urbanization trends. Providers charge higher premiums in locations with more cars ...

In this chapter (1)

• Business Locations
• Share of revenue, establishment, wages and employment in each state
• Share of population compared to establishments in each region in 2024
• Number and share of establishments in each state in 2024
• Number and share of revenue each state accounts for in 2024
• Number and share of wages each state accounts for in 2024
• Number and share of employees in each state in 2024
• Geographic spread of the industry across North America, and trends associated with changes in the business landscape
• Key success factors for businesses to use location to their advantage

Competitive Forces

Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.

• Concentration
• Barriers to Entry
• Substitutes
• Buyer & Supplier Analysis
• Industry concentration level
• Industry competition level and trend
• Barriers to entry level and trend
• Substitutes level and trend
• Buyer power level and trend
• Supplier power level and trend
• Market share concentration among the top 4 suppliers from 2019-2024
• Supply chain including upstream supplying industries and downstream buying industries, flow chart
• Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
• Key success factors for businesses to manage the competitive environment of the industry.
• Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
• Key success factors for potential entrants to overcome barriers to entry.
• Competitive threats from potential substitutes for the industry’s own products and services.
• Key success factors for how successful businesses can compete with substitutes.
• Advantages that buyers have to keep favorable purchasing conditions.
• Advantages that suppliers have to maintain favorable selling conditions.
• Key success factors for how businesses can navigate buyer and supplier power.

Learn about the performance of the top companies in the industry.

The top three companies account for over one-third of revenue. Larger companies have explored acquiring smaller insurers to expand their market share.

• Market Share Concentration
• Company Spotlights
• Industry market share by company in 2020 through 2024
• Major companies in the industry, including market share, revenue, profit and profit margin in 2024
• Overview of Progressive Corp's performance by revenue, market share and profit margin from 2018 through 2024
• Overview of State Farm Mutual Automobile Insurance Co's performance by revenue, market share and profit margin from 2018 through 2024
• Overview of Berkshire Hathaway Inc.'s performance by revenue, market share and profit margin from 2018 through 2024
• Overview of revenue, market share and profit margin trend for one additional company
• Description and key data for Progressive Corp, and factors influencing its performance in the industry
• Description and key data for State Farm Mutual Automobile Insurance Co, and factors influencing its performance in the industry
• Description and key data for Berkshire Hathaway Inc., and factors influencing its performance in the industry
• Description, key data and performance trends for one additional company

External Environment

Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.   

The Uniform Certificate of Authority Application assists insurers in filing copies of the same applications in numerous states. Each uniform state performs an independent rev...

• External Drivers
• Regulation & Policy
• Regulation & policy level and trend
• Assistance level and trend
• Regulation & Policy historical data and forecast (2014-2029) 
• Assistance historical data and forecast (2014-2029) 
• Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
• Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
• Key governmental and non-governmental groups or policies that may provide some relief for industry operators.

Financial Benchmarks

View average costs for industry operators and compare financial data against an industry's financial benchmarks over time. 

Operators have benefited from rising interest rates as fixed-income assets yield more return. Although, fears of an economic recession can lead investors to seek safer invest...

• Cost Structure
• Financial Ratios
• Profit margin, and how it compares to the sector-wide margin
• Average wages, and how it compares to the sector-wide average wage
• Largest cost component as a percentage of revenue
• Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
• Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
• Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
• Investment vs. share of economy

Data tables

• Industry Multiples (2017-2022)
• Industry Tax Structure (2017-2022)
• Income Statement (2017-2022)
• Balance Sheet (2017-2022)
• Liquidity Ratios (2017-2022)
• Coverage Ratios (2017-2022)
• Leverage Ratios  (2017-2022)
• Operating Ratios (2017-2022)
• Cash Flow & Debt Service Ratios (2014-2029)
• Revenue per Employee (2014-2029)
• Revenue per Enterprise (2014-2029)
• Employees per Establishment (2014-2029)
• Employees per Enterprise (2014-2029)
• Average Wage (2014-2029)
• Wages/Revenue (2014-2029)
• Establishments per Enterprise (2014-2029)
• IVA/Revenue (2014-2029)
• Imports/Demand (2014-2029)
• Exports/Revenue (2014-2029)
• Trends in the cost component for industry operators and their impact on industry costs and profitability 

Key Statistics

Industry data, data tables.

Including values and annual change:

• Revenue (2014-2029)
• IVA (2014-2029)
• Establishments (2014-2029)
• Enterprises (2014-2029)
• Employment (2014-2029)
• Exports (2014-2029)
• Imports (2014-2029)
• Wages (2014-2029)

How are IBISWorld reports created?

IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.

Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.

IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.

What data sources do IBISWorld analysts use?

Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.

Key data sources in the US include: 

• US Census Bureau
• US Bureau of Labor Statistics
• US International Trade Commission

Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.

These sources include:

• Industry and trade associations
• Industry federations or regulators
• Major industry players annual or quarterly filings

Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.

How does IBISWorld forecast its data?

IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.

IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.

Learn more about our methodology and data sourcing on the Help Center .

Frequently Asked Questions

Unlock comprehensive answers and precise data upon purchase. View purchase options.

What is the market size of the Automobile Insurance in the US industry in United States in 2024?

The market size of the Automobile Insurance in the US industry in United States is $364.9bn in 2024.

How many businesses are there in the Automobile Insurance in the US industry in 2024?

There are 1,399 businesses in the Automobile Insurance in the US industry in United States, which has grown at a CAGR of 0.4 % between 2019 and 2024.

Has the Automobile Insurance in the US industry in United States grown or declined over the past 5 years?

The market size of the Automobile Insurance in the US industry in United States has been declining at a CAGR of 0.5 % between 2019 and 2024.

What is the forecast growth of the Automobile Insurance in the US industry in United States over the next 5 years?

Over the next five years, the Automobile Insurance in the US industry in United States is expected to grow.

What are the biggest companies in the Automobile Insurance in the US market in United States?

The biggest companies operating in the Automobile Insurance market in United States are Progressive Corp, State Farm Mutual Automobile Insurance Co and Berkshire Hathaway Inc.

What does the Automobile Insurance in the US in United States include?

Directly underwriting private passenger liability insurance and Directly underwriting private passenger collision/comprehensive insurance are part of the Automobile Insurance in the US industry.

Which companies have the highest market share in the Automobile Insurance in the US in United States?

The company holding the most market share in United States is Progressive Corp.

How competitive is the Automobile Insurance in the US industry in United States?

The level of competition is high and steady in the Automobile Insurance in the US industry in United States.

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Tourism Business Insurance

The 3 Types of Tourism Company Insurance That You May Wish to Consider

Whether you offer kayaking, ziplines, or guided tours, there’s one thing that all tourism industry operators have in common: They get to have a lot of fun on the job!

But as the owner of a travel and tours business, however, even with your days of excitement and adventure, you still have all the very real concerns of running a small business. You have to cover payroll, you have to manage employees, and, depending on your exact product or service, safety standards is always top-of-mind.

High-quality tourism company insurance can give you peace of mind while also helping you protect your company from unforeseen and/or fortuitous losses. 

Why is Commercial Property Insurance Important For Tourism Businesses?

Chances are that as a tourism business, you’ve got certain pieces of equipment that your company simply couldn’t function without.

Whether you own kayaks, lifejackets, and canoes or you’re a souvenir shop that sources its own inventory, if a fire were to break out or your business property were to be damaged by some other form of insured peril, chances are that replacing everything out-of-pocket would put a lot financial strain on your business. 

With commercial property insurance, it’s possible to replace equipment without having to dip into your personal or professional savings. 

What Does Cyber Liability Insurance Cover For Tourism Businesses?

With data breaches, hackers, and identity theft becoming fairly prominent topics on the news, it’s more important than ever for businesses to be extra careful with client information. It just takes one cybersecurity incident for personal information to fall into the wrong hands. 

But cyber liability coverage isn’t just there for data privacy breaches. It can also cover situations like cybercrime, cyber extortion or the accidental sending an email that’s been compromised with a virus.

Because many travel and tours businesses allow customers to book online, cyber liability insurance is a coverage option that can enhance safety risk control on both sides of the transaction.

Why Should You Consider Commercial General Liability Insurance For Your Tourism Company?

If your business relies in part or in whole on vigorous outdoor activities like skiing or wilderness tours, rock climbing, there’s a chance that a customer could suffer a minor or serious personal injury. And even if your business is not that adventurous and all you have is a store, a customer can fall on a wet floor and put your company at risk of a lawsuit.

CGL insurance is primarily known for its ability to cover slip and fall-related litigation. But the truth is that coverage can also extend to false advertising claims and accidents. That’s why for many businesses, CGL insurance is one of the first insurance options that they bring up with their brokers.

Here’s Why You Should Hire Commercial Insurance Experts For Your Tourism Company Insurance Needs

When it comes to tourism company insurance, companies have to walk a fine line. On the one hand, you don’t want to be underinsured and unable to get the benefits of coverage when you need them. But at the same time, being overinsured can leave you and your business paying more than you need to for years on end.

An insurance broker can help you navigate your options until you’ve found a plan that works for you. Contact an ALIGNED broker today and get a FREE quote. We’re here to help!

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Guide to car insurance: Bankrate’s essential auto insurance road map

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The Bankrate promise

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation of how we make money . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure .

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts , who ensure everything we publish is objective, accurate and trustworthy.

Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most — price, customer service, policy features and savings opportunities — so you can feel confident about which provider is right for you.

• We guide you throughout your search and help you understand your coverage options.
• We provide up-to-date, reliable market information to help you make confident decisions.
• We reduce industry jargon so you get the clearest form of information possible.

All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first.

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Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

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Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.

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Key takeaways

• Car insurance is a financial product designed to protect your finances from the fallout of auto accidents and injuries.
• Auto insurance policies consist of numerous different coverage types.
• Comparing car insurance quotes from different companies can help you find the right policy for your needs.
• Many factors affect your car insurance rates, including your age and gender (in most states), the type of vehicle you drive, your driving history and the specific coverage you buy.

Car insurance is an important purchase, but it doesn’t have to be intimidating. Bankrate’s insurance editorial team — which includes licensed agents — is here to help you feel more confident about getting quotes and buying car insurance. After reading this car insurance guide, you’ll better understand the parts of an auto insurance policy, the coverage you might need and the process of comparing quotes.

What is car insurance?

Car insurance is a contract between you and your auto insurance company in which, in exchange for payment, the company shares in the financial risk of potential car-related incidents. By spreading the risk of loss among a group of policyholders or a shared risk pool, car insurance companies help you mitigate financial losses from accidents, theft and other covered claims involving your vehicle.

Insurance is a financial product. It’s important to note that getting a car insured does not physically protect your car; it protects your finances. This means that choosing the right company, coverage types and coverage levels for your needs is important for your overall financial health. The following section of this auto insurance guide explains how various coverage types payout in the event of a claim and where to find more detailed coverage information within your policy contract.

Understanding your auto insurance policy coverage

Although car insurance has several coverage types, each type falls into one of two categories: first-party or third-party coverage. The term first-party refers to you and your passengers. First-party coverage pays for damage and injuries sustained by you, your passengers or your vehicle. Third-party refers to others, and these coverage types pay for the injuries or property damage you cause to another person.

First-party coverage types: claim payouts for you and your passengers

• Uninsured motorist bodily injury
• Uninsured motorist property damage
• Underinsured motorist bodily injury
• Underinsured motorist property damage
• Medical payments/Personal injury protection (PIP)
• Collision coverage
• Comprehensive coverage

Third-party coverage types: claim payouts for others

• Bodily injury liability
• Property damage liability

Upon purchasing coverage with a new carrier, you will receive a declarations page reflecting information about your policy, such as driver information, covered vehicles, coverage selection and policy premium. You will also receive a personal auto policy agreement with general information. This document usually opens with a definition glossary followed by six “parts” explaining how each coverage works. Here is an example of a typical policy agreement layout:

• Part A: Liability coverage
• Part B: Medical payments coverage
• Part C: Uninsured motorist coverage
• Part D: Coverage for damage to your auto
• Part E: Duties after an accident or loss
• Part F: General provisions

Understanding policy cancellation and nonrenewal provisions

Rules dictating how you or your insurance company can terminate the contract vary between states and carriers. Most policies can only be canceled by the insurance company due to non-payment or material misrepresentation once they have been in force for 60 days. After 60 days, carriers can opt to nonrenew your policy for additional reasons. However, this usually only happens if your policy is deemed too risky.

In most states, you can cancel your policy at any time by returning the physical policy to the insurance company or by sending a written letter of cancellation. Some states and companies may require proof of other car insurance or proof that the plates have been surrendered to the Department of Motor Vehicles (DMV) before allowing you to initiate a policy cancellation.

Check under Part F — General provisions to find out how and when your policy can be canceled, notification time frames and whether you may be subject to a termination or cancellation fee.

Compare auto insurance rates

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Rates increased up to 12% this year.

Costs will continue to rise through 2022. Shop for a better rate before you renew your current policy.

How much car insurance do I need?

Bankrate’s guide to car insurance can outline how auto insurance works, but how much car insurance you need will depend on your individual circumstances. You’ll have to purchase at least the required minimum coverage types and limits in your state to drive legally. Most car insurance experts recommend purchasing higher liability limits, even if you opt for a liability-only policy. You’ll pay more for coverage, but you’ll also likely have lower out-of-pocket expenses if you cause an accident and the damages exceed your insurance coverage limits.

States only mandate liability-only coverage , which does not pay for damage done to your car if you are at fault for an accident. If you have a loan or lease on your car, your financial institution will likely require you to have a full coverage policy, which includes comprehensive and collision coverage. Leasing companies also require drivers to have higher liability limits, usually 100/300/50. But even if you own your car outright, you might want to consider purchasing full coverage — especially if your vehicle is newer, relatively expensive or you do not have the funds to repair or replace it yourself after an accident.

Types of car insurance coverage

An auto insurance policy is a package of several coverage types . The kinds and amounts of coverage you choose will depend on your specific situation. Experts recommend speaking with an agent who can help you design a policy that best suits your circumstances.

Some common coverage types are:

Car insurance coverage for other drivers

The core coverage on car insurance policies is the liability coverage. These are generally required by law and can help protect you financially from damage and injuries others incur after an accident you cause.

• Bodily injury liability : This is designed to cover the cost of injuries that you cause to another party in an accident.
• Property damage liability : This pays for the damage you cause to someone else’s property in an at-fault accident, like damage to another vehicle, a building or personal property.

Car insurance coverage for you and your passengers

Some parts of a car insurance policy are designed to financially protect you and your passengers from the expense of injuries.

• Uninsured motorist coverage and underinsured motorist coverage: These coverage types can pay for your damages and injuries if you are hit by a motorist who does not have any insurance or does not have enough insurance to cover your expenses.
• Medical payments coverage : This pays for your and your passengers’ medical bills from an accident, regardless of fault. It may be mandatory, optional or not available, depending on where you live.
• Personal injury protection (PIP) : This coverage is similar to medical payments but also covers lost wages and the cost of hiring someone to do household tasks if you or a passenger cannot complete them. It is required in no-fault states , may be optional in other states or, like medical payments, may not be available depending on where you live.

Car insurance coverage for your vehicle

If you choose certain coverage types, your car insurance policy could protect your finances from damage your vehicle sustains.

• Collision : This covers the damage to your car caused by colliding with another vehicle or object.
• Comprehensive : Often called “other-than-collision” coverage, this pays for damage to your car caused by various scenarios, including theft, vandalism, sudden weather damage and hitting an animal. Adding comprehensive and collision to your policy means you are purchasing “full coverage.”

Optional endorsements

An auto insurance guide would only be complete with showcasing some of the optional coverage types drivers may have available to them. For an additional premium, optional endorsements allow policyholders to customize their coverage. Endorsement options will vary between carriers, but here are some common coverage types:

• Gap insurance : Guaranteed assets protection pays for the difference between your car loan or lease balance and the actual cash value (ACV) payment when your car is totaled from a covered claim. Drivers likely to be upside down on their car loan or own more on the loan than the vehicle’s AVC may have put less than 20 percent down on their new car purchase or opted for a more extended loan period.
• Rental car coverage : If your vehicle is not inoperable due to a covered loss, this endorsement could reimburse you for the cost of a rental car up to the policy’s limits.
• Roadside assistance : This optional coverage can help cover the costs of service calls, like tows, locksmith services and battery jumps. However, this covers breakdowns, usually not towing services for a collision. Typically, recovery towing is covered under your collision coverage.
• Rideshare insurance : Your basic auto insurance policy isn’t sufficient if you use your car for rideshare or app-based delivery services. A rideshare endorsement will provide coverage when you are actively available but have yet to match with an order request or rider.
• Modified car coverage : Drivers who customize their vehicles for accessibility or style may need to add this endorsement to their policy to cover the added cost of equipment and labor in case of a covered claim.
• New car replacement insurance : Collision and comprehensive coverage pays out up to the vehicle’s ACV minus the deductible. With this optional endorsement, you may receive a claim payment equal to the cost of buying a new car of the same make and model.

How to compare car insurance rates

Average car insurance rates vary by company, vehicle and driver. Using this car insurance guide while comparing rates and coverage types among various carriers may help you find a policy that fits your needs for the most affordable price. When requesting car insurance quotes , ask each provider for the same coverage types and policy limits (or as close as possible). That way, you’ll be comparing apples to apples.

Factors that affect car insurance rates

Your car insurance premium is not just based on which company you choose. Numerous other factors can impact how much you pay for auto insurance, including:

• Age: Young drivers and those who have just earned their license are more prone to accidents and risky driving behavior compared to other groups. This typically equates to higher-cost car insurance premiums. In all states except California, Hawaii and Massachusetts, your age impacts your car insurance premium, with teens paying the most. As you age into your 20s and 30s , car insurance rates generally begin to drop. However, rates may slightly increase again once you reach 70 years of age .
• Gender: Males tend to pay higher rates than females due to an increased likelihood of getting into more accidents and more severe accidents. California, Hawaii, Massachusetts, Montana, North Carolina and Pennsylvania do not allow insurance companies to use gender as a factor to calculate your premium.
• Vehicle type: The vehicle you drive is another big factor in how much you will pay. Some vehicles are cheaper to insure than others.
• Credit rating: It may be surprising, but your credit score may impact your car insurance premium. Drivers with low credit scores tend to file more claims than drivers with higher scores, so insurance companies charge higher premiums to compensate for the increased risk. Not all states allow credit to be used in determining your rate.
• Driving record: If you have accidents, tickets or DUI convictions on your motor vehicle record, you will likely pay more for insurance.
• Insurance history: Drivers with continuous insurance tend to pay less than drivers with lapses in coverage or no insurance history.
• Coverage type and limits: Your premium will vary depending on your selected coverage type and limits. Generally, the more extensive the policy, the more you’ll pay.
• Discounts: If you qualify for one or more car insurance discounts , you may be able to lower your premium. You may also save money on car insurance if you are married. And if you are a military member or a veteran , you could find specialized discounts or less expensive coverage options.

Car insurance rates by company

When shopping for car insurance, you’ll need to decide which car insurance companies to request quotes from. Different companies have different ways of rating policies, so prices will vary even for the same coverage.

First, you may want to consider what factors matter most to you. Are you looking for the lowest price possible or certain features like a mobile app or high customer satisfaction scores? High-risk drivers may need coverage with a nonstandard carrier, while others with high-value vehicles may need enhanced coverage options. By deciding what you want from an insurance company, you may be able to narrow down which companies to approach for quotes.

Car insurance rates by state

In addition to the factors listed above, where you live significantly impacts your car insurance premium. Your state’s minimum coverage laws, the traffic density of your neighborhood, the average severity of accidents and the percentage of uninsured motorists can all impact the average car insurance cost in your state .

Car insurance rates by age

As previously mentioned, your age significantly affects how much your car insurance costs due to the risk of accidents and claims associated with different driver age groups. Younger drivers usually pay higher rates due to an increased risk of accidents, while older drivers tend to pay lower rates, since they have more experience behind the wheel. Currently, Hawaii and Massachusetts are the only two states that limit the use of age as a rating factor for car insurance. While Hawaii does not use age, Massachusetts allows carriers to rate for driving experience.

Tips for shopping for car insurance

Once you understand the different types of car insurance and the factors that impact your rate, you’re better equipped to shop around for coverage. Shopping for car insurance involves a bit of legwork, but it’s generally the same from company to company. Whether you shop online or work with an agent, you’ll be asked to provide some information about yourself and answer a few questions.

Here are some tips that could help:

• Compare quotes accurately. This may be the most important part of the car insurance shopping process. When you receive quotes back from each carrier, make sure that the coverage types, limits and deductible amounts are identical. Without checking for this, you may mistake one carrier as being cheaper without realizing it’s giving you less coverage.
• Understand your deductible. If you have comprehensive and collision coverage on your car insurance policy, you will have a deductible for each. The deductible refers to the amount you are responsible for paying out of pocket in the event of a covered claim, while your car insurance company covers the rest. A higher deductible might result in a cheaper policy, but make sure the deductible amount is something you could easily pay if you need to file a claim.
• Shop after life events. Buying a new car, getting married and adding a child to your policy could impact your car insurance rate . Because of that, these and other life events may be a good opportunity to reevaluate your car insurance coverage and premium.
• Shop before buying a new car. To save money in the long run, get quotes for several cars before heading to the dealership to pick out your new car. This way, you can select a vehicle that fits your car insurance budget.

How to file a car insurance claim

Even the most careful driver may experience an accident at some point. While this can be scary, understanding the steps to take when filing a claim can alleviate some stress.

• Gather information: Collect contact and insurance information for the passengers in your car and the people from any other vehicle involved in the accident. If there are any witnesses, try to get their contact information as well. They may help settle any disputes that can arise.
• Contact your claims department: Depending on your insurance company, you may need to call an agent to file a claim or submit it through your carrier’s mobile app. Be prepared to submit photos of any damage to your or the other driver’s vehicle, contact information for all parties involved and answer some questions. Claim agents can request specific information such as what time the accident happened, where you were driving to or from or what the weather conditions were like.
• Take notes: Your claim agent may give you a lot of information at a time when you may still be shaken up from the accident. Upon first contact with your carrier, they can usually tell you your deductible, where they towed your car and what repair shop to go to.
• Maintain communication: Respond to any communication from your insurance company immediately to ensure timely claim processing.
• Receive your claim payment: How you receive your claim payment depends on several factors. If your car is leased or still has a loan, you may receive a check made out to you and your bank. If you go to a repair shop recommended by your insurance carrier, they may pay the shop directly, and you will only be responsible for paying the deductible.

Frequently asked questions

How do i get the cheapest car insurance possible, what happens if i don’t buy car insurance, what is no-fault insurance, are car insurance rates increasing, what is the best car insurance company.

The average cost of car insurance in 2022

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