Are major auto insurance companies better than smaller ones?
Choosing between a major insurance provider and a smaller insurance company may seem complicated, but comparing rates will help you make the best decision.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
UPDATED: Sep 5, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 5, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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If you are shopping for a car insurance policy, you know what a headache it can be. Not only do you have to decide whether you want a full coverage policy that includes collision and comprehensive insurance, but you also have to decide between a growing number of insurance providers.
See our list of the best comprehensive coverage auto insurance companies.
Many people wonder whether the benefits of a small insurance company vs large. Are small insurance companies good? Some consumers wonder if they can provide the same insurance products as the well-known, big insurance companies in the U.S.
But the truth is that both major car insurance companies and small car insurance providers both have their benefits.
Smaller insurance companies will usually differ from larger insurance companies. Learn more here.
- Choosing the right car insurance company can be difficult because there are so many options
- Larger insurance providers offer more financial stability
- Small car insurance companies are often able to give policyholders more individualized attention
Are big car insurance companies better?
The major insurance companies in the US are the big name insurance companies you’ve seen advertisements for on television and other media forms. The large and popular big name car insurance companies are often the companies people think of first for car insurance or any form of insurance coverage.
Some customers may consider the large auto insurance companies to be better than small companies simply because of their size. But this is not always the case. Alternatively, one might ask, are smaller insurance companies better? Well, it might depend.
Some of the largest car insurance companies in the USA have a lot to brag about regarding overarching coverage options and accessibility with mobile apps, but that doesn’t always mean you will find the best coverage at the lowest price with a major insurance provider.
We’ve reviewed the best auto insurance company apps for reference on the most competitive insurance companies.
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What are the most popular auto insurance companies?
Many people like to start their search for auto insurance by looking at a provider with a big name in insurance coverage. For example, State Farm is one of the major car insurance players in the industry. The table below shows the top 10 auto insurance providers in the U.S., the average annual cost of a full coverage policy with each company, and each insurer’s percentage of the market share.
10 Largest Car Insurance Companies in the U.S.
Company Average Annual Full Coverage Rates Market Share
State Farm $1,500 16%
Geico $14,015 14%
Progressive $15,012 13%
Allstate $1,981 9%
USAA $1,232 6%
Liberty Mutual N/A 5%
Farmers $2,016 4%
Nationwide $1,496 2%
American Family $1,923 2%
Travelers $1,337 2%
When you look at the table, it can be startling to see the difference in the cost of full coverage between big name insurance car companies.
So while you may initially feel more comfortable considering well-known insurance companies you’ve heard of before, you may be able to find more competitive rates with smaller companies in your area, so don’t discount doing a price comparison of big vs small insurance groups even when looking for the most popular auto insurance.
What are the benefits of choosing a smaller insurance company?
Small insurance companies don’t have the same kind of overhead that the big names of car insurance do. With no commercial fees or advertising costs, some smaller companies save enough money to offer more affordable car insurance coverage options. You may end up finding that the best small auto insurance companies are perfect for your needs.
Along with lower rates, smaller companies are often able and willing to provide more individual, one-on-one attention to policyholders. If you know you want a personable company with agents and representatives who are able and willing to help you whenever you need it, a smaller company may be a better fit for you.
A lesser-known benefit of lesser known insurance companies is where the money goes. For example, suppose you pay your insurance premiums to a small company in your community rather than a company that is more of a big insurance provider.. In that case, a portion of that money may be used to fund small businesses within your community, allowing the place you live to thrive more off of each dollar you spend.
Are there downfalls to choosing lesser known car insurance companies?
As is the case with anything, there are also negatives to doing business with a small company. The most notable downfall of choosing a small insurance provider is the company’s potential lack of financial stability, often because the company does not bring in the same amount of revenue as some of the biggest car insurance companies.
Small companies may also be less willing to offer discounts on auto insurance coverage. Because auto insurance discounts can save policyholders up to 20% on monthly rates, some customers only want to do business with companies that provide many discount options.
However, if you receive a quote from a small insurance company that is already less than a quote with a major provider, the discounts may not be necessary to save money on monthly rates.
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What are the pros and cons of large auto insurance companies?
As mentioned above, larger companies often have more financial stability than smaller providers. Most larger insurance providers have robust histories in the business, which means you may be more likely to get the money you deserve when you file a claim. Some insurance companies for auto insurance are part of a network, so you may want to do a comparison of big vs small insurance aggregators as well.
Many major insurance providers offer conveniences that smaller companies do not have, such as mobile apps you can use to make monthly payments and file an insurance claim. For some policyholders, these conveniences are extremely important.
Larger companies also offer more discounts on average. But discounts from large companies may still add up to higher rates than smaller insurers, so you should compare quotes with both large and small companies in order to see who has the best rates.
Besides not always offering the lowest rates, large-scale companies are also less likely to provide personalized attention to their customers. Because major insurers have so many people who purchase policies from them, it’s difficult for agents of large insurance companies to offer as much one-on-one attention.
How do auto insurance rates differ between large and small companies?
You’ll never know how much companies will ask you to pay for your insurance coverage until you get direct quotes. Getting direct quotes from multiple companies – large and small – is the best way to decide which car insurance provider is best for you.
The table below shows the average annual full coverage auto insurance rates in each state.
Average Annual Full Coverage Auto Insurance Rates by State
States Average Annual Rates
Idaho $679.89
Iowa $702.46
Maine $703.82
Wisconsin $737.18
Indiana $755.03
Vermont $764.02
South Dakota $766.91
North Dakota $773.30
Ohio $788.56
North Carolina $789.09
New Hampshire $818.75
Nebraska $831.02
Virginia $842.67
Wyoming $847.44
Kansas $862.93
Montana $863.52
Alabama $868.48
Tennessee $871.43
Missouri $872.43
Utah $872.93
Hawaii $873.28
Minnesota $875.49
Illinois $884.56
Oregon $904.83
Arkansas $906.34
New Mexico $937.59
Kentucky $938.51
Washington $968.80
Pennsylvania $970.51
Arizona $972.85
South Carolina $973.10
Colorado $981.64
California $986.75
Mississippi $994.05
Oklahoma z$1,005.32
West Virginia $1,025.78
Alaska $1,027.75
Georgia $1,048.40
Nevada $1,103.05
Texas $1,109.66
Maryland $1,116.45
Massachusetts $1,129.29
Connecticut $1,151.07
Delaware $1,240.57
Florida $1,257.13
Rhode Island $1,303.50
District of Columbia $1,330.73
New York $1,360.66
Michigan $1,364.00
New Jersey $1,382.79
Louisiana $1,405.36
U.S. Average $1,009.38
As you can see, car insurance rates vary significantly from one state to another. And car insurance rates vary from one car insurance provider to the next.
So which car insurance is better? That will depend on your own needs. The best business auto insurance company may not be the best townhouse insurance provider.
If you find a car insurance company that offers competitive rates in your area, you can call and speak to an agent to learn more. The best thing you can do when shopping online for car insurance coverage is to take your time and compare as many options as possible to find the best price.
Large Versus Small Auto Insurance Companies: The Bottom Line
Both large and small insurance providers have their pros and cons. Some companies can offer better rates and more personalized attention, while others have more discounts to choose from and more reliable financial stability. The big names of car insurance companies doesn’t matter more than the coverage they can offer you.
Which auto insurance company is better? If you are having difficulty choosing between a large insurance company or a small insurance company, the best thing you can do is compare quotes online. Use our guide on how to get auto insurance quotes to help you.
Comparing online quotes from multiple insurance providers will help you see which companies – big and small – offer the most affordable rates. You can also look up average rates by searching the name of car insurance companies online and looking at car insurance reviews.
Once you have narrowed down your search to a few car insurance carriers, it’s a good idea to call them individually and ask if there are additional ways you can save on your monthly rates. While choosing the right insurance company may take a bit of effort, it is worth it in the long run. Taking the time to do a little research will help you find the best independent insurance companies.
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Frequently Asked Questions
What are major auto insurance companies?
Major auto insurance companies are well-established and widely recognized insurance providers that operate on a large scale, often serving a significant portion of the market.
What is considered to be a major insurance company? Examples of major insurance companies with auto coverage include State Farm, Allstate, Geico, Progressive, and Nationwide.
Are major auto insurance companies better than smaller ones?
The superiority of major auto insurance companies compared to smaller ones is subjective and depends on various factors. It’s important to note that both major and smaller insurance companies can offer quality coverage and excellent customer service.
The “better” choice depends on your specific needs, preferences, and circumstances. The most popular insurance companies may be considered one of the mom and pop insurance companies in your area.
What are the potential advantages of major auto insurance companies?
Major auto insurance companies often have extensive resources, larger financial reserves, and well-established infrastructures. They may offer a broader range of coverage options, additional discounts, and various add-on features.
Additionally, major insurers often have widespread agent networks, allowing for convenient in-person support across different locations. Sometimes even a familiar name of auto insurance companies can provide a better sense of security if it’s considered a name brand car insurance provider.
What are the potential advantages of smaller auto insurance companies?
Smaller auto insurance companies may provide a more personalized and customer-centric experience. They often focus on niche markets or specific regions, which can result in tailored coverage options and more attentive customer service.
Smaller companies may also be more agile and flexible in adapting their policies and rates to meet changing market dynamics, so don’t automatically disregard mom and pop auto insurance providers in favor of more popular insurance companies.
What factors should I consider when choosing between major and smaller auto insurance companies?
You might wonder what makes one insurance company better than another? When deciding between major and smaller auto insurance companies, it’s essential to consider factors such as your budget, coverage needs, customer service preferences, claims satisfaction ratings, financial stability, and the insurer’s reputation.
Comparing quotes, reading reviews, and seeking recommendations can help you make an informed decision.
Are major auto insurance companies more reliable?
Major auto insurance companies often have established track records and strong financial stability due to their size and market presence. However, it’s crucial to research an insurer’s financial ratings and reviews to assess their reliability. Smaller insurance companies can also be reliable, especially if they are well-regulated and have positive customer feedback.
Do major auto insurance companies always offer better rates?
Not necessarily. While major auto insurance companies may have the advantage of scale and bargaining power with repair shops and suppliers, their rates may not always be the most competitive. It’s important to obtain quotes from multiple insurers, both major and smaller ones, to compare rates and ensure you are getting the best deal.
Can I trust smaller auto insurance companies with my coverage?
Trustworthiness depends on the specific insurance company’s reputation, financial stability, and customer reviews. Smaller auto insurance companies can certainly provide reliable coverage, but it’s essential to conduct thorough research to ensure they meet your standards for trustworthiness and financial security.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.