Small auto insurance companies

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As of 2019, there were nearly 2,500 property and casualty insurance companies in the market. Some large insurance companies serve millions of drivers around the country, whereas others have a much smaller customer base and only sell coverage in one state or region. Although large car insurance companies are usually the more popular option, there are perks to purchasing car insurance from a small car insurance company.

Advantages of small auto insurance companies

For certain drivers, purchasing auto insurance from a small insurer is a good option. Working with a small insurance company has several advantages compared to working with a large insurance company. Here are some of the most significant upsides to small car companies:

Personalized customer service

Small insurance companies usually have better customer service than large insurance companies. More importantly, the service is often more personalized, so your agent will know your name, and you will likely have a better experience with claims adjusters.

More affordable rates

Some small auto insurance companies can offer cheaper rates because they do not spend as much money on staffing and advertising. However, it is important to note that this is not always the case. It is also possible that a local insurance company will offer higher rates than a national insurance company.

Supporting a local business

One of the main reasons many drivers like working with local car insurance companies is that they can support a local business. The money they pay in premiums goes back into their community, as opposed to a huge corporation.

Specialized coverages

If you choose a local auto insurance company, you might be able to get more specialized coverage. For example, if you buy car insurance from a company that exclusively serves California drivers, they might offer higher coverage limits for earthquake or wildfire damage.

Car insurance rates with a smaller company

Car insurance rates from small insurance companies differ significantly. You can find cheap rates from small insurance companies, but it is not a guarantee. Some small insurance companies charge higher rates because they have a smaller customer base and less revenue.

The two tables below highlight insurance premiums from the four largest carriers by market share and compare rates from some smaller carriers. Keep in mind that these premiums are averages based on a sample quote, so your actual rate will vary.

Average rates from largest auto insurance companies

Large auto insurance companies Average full coverage premium
Geico $1,405
State Farm $1,457
Progressive $1,509
Allstate $1,921

Average rates from small auto insurance companies

Small auto insurance companies Average full coverage premium
Plymouth Rock $959
Auto-Owners $1,351
Amica $1,378
Alfa $2,085

Ways to save with a small auto insurance company

If you go with a small auto insurance company, there are some ways you can potentially save money on your premium. First, look for local auto insurance companies that offer discounts you can take advantage of. The more discounts you qualify for, the more money you can save.

Additionally, think about paying your annual premium in total, which can usually help you get a better rate. Some insurance companies even offer savings if you enroll in automatic payments or sign up for paperless billing statements.

Lastly, we recommend improving your credit score as a way to save money on car insurance. Drivers with a poor credit score pay the highest rates in most states, so improving your credit is often an effective way to get a cheaper rate.

Coverage options with small auto insurance companies

Whether you choose a small insurance company or a large provider, the coverage options will be essentially the same. All insurance companies will offer the basics, including state-minimum liability coverage, collision, comprehensive, medical payments and personal injury protection (PIP) if you live in a no-fault state.

Typically, small insurance companies offer popular endorsements, like gap insurance, roadside assistance and rental car reimbursement. However, you may find that local insurance providers offer fewer unique endorsements, like special coverage for hybrids or new car replacement coverage, compared to large companies.

Disadvantages of small auto insurance companies

There are a handful of disadvantages to working with a smaller auto insurance company. First, small insurance companies usually sell coverage in a limited area. That means you will need to shop around for local insurance companies that serve your city and state.

In addition, small insurance companies usually do not have the most up-to-date tools and technology, like a mobile app or online claim reporting. You might also find that some local auto insurance companies are more selective in their eligibility, which might make it more challenging to get approved for coverage.

Local insurance companies

We should point out that the definition of a small insurance company is not one-size-fits-all. A small insurance company could serve an entire region of states, like the ones on our list above, or apply to a provider that only serves one very small area.

For example, Edison Insurance only sells coverage in Florida, Maine Coast Insurance Agency sells coverage throughout Maine and Nia Insurance sells coverage in the Omaha, Nebraska area.

When you are shopping for your next insurance policy, you might consider looking into local insurance companies during your search. We recommend checking out local insurance providers if you value good customer service or prefer to work with an agent.

Frequently asked questions

What is the best car insurance company?

The best car insurance company is different for every driver. It depends on where you live, what type of coverage you need, your budget and what you value in an insurance company. To find the best car insurance company for you, we recommend shopping around and comparing providers based on your criteria.

How much does car insurance cost?

In the United States, the average cost of car insurance is $565 per year for a minimum coverage policy and $1,674 per year for a full coverage policy. However, the actual rate you pay depends on factors like your age, state, credit score, claims history and the type of car you own.

How much car insurance do I need?

Car insurance is required in almost every state, and you must carry the minimum amount of insurance required in your state to drive. You will be required to have personal liability insurance, including bodily injury and property damage liability coverage. If you live in a no-fault state, you will also need to buy personal injury protection (PIP).

Methodology

Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2018 Honda Accord, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.