Choosing between small and large insurance companies
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When it comes to car insurance companies, drivers have their pick of options. There are hundreds of car insurance companies out there to choose from. Some of these companies are massive, with tens of thousands of agents that operate primarily out of a call center. Other companies are small independent agencies with only a handful of people working in a local office. Whether or not you decide to insure with a small insurance company or a large insurance company is typically a personal preference. Bankrate has broken down the pros and cons of each to help you find the insurer that’s perfect for you.
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Compare auto insurance rates
Save on auto insurance with quotes from trusted providers like:
Drivers switch & save an average of $750+/year
Are you overpaying for auto insurance?
Safe drivers choose Allstate®
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Small vs large insurance companies
Although there are no rules that define small and large insurance companies, small companies are usually the local offices you find in your community. Large insurance companies, on the other hand, advertise and write policies on a national level. A small company is likely only open during regular business hours, while a large company may be open 24/7 with the help of regional call centers. Large, call center-driven insurance companies may also have local offices to help customers who prefer to do business in person, but those local offices are usually limited in number. Geico is an example of a large insurance company with both call centers and limited local offices.
Top 10 largest insurance companies by market share
When comparing multiple quotes from different insurance companies, many drivers find it easier to start with the largest companies. The top 10 largest car insurance companies based on market share represent the majority of drivers in the U.S.
| Company | J.D. Power score | Average annual minimum coverage premium | Average annual full coverage premium | Market share |
|---|---|---|---|---|
| State Farm | 892/1,000 | $456 | $1,397 | 16% |
| Geico | 881/1,000 | $365 | $1,297 | 14% |
| Progressive | 862/1,000 | $542 | $1,561 | 14% |
| Allstate | 870/1,000 | $558 | $2,438 | 10% |
| USAA | 909/1,000 | $354 | $1,209 | 6% |
| Liberty Mutual | 876/1,000 | Rates not available | Rates not available | 5% |
| Farmers | 893/1,000 | $550 | $1,524 | 5% |
| Nationwide | 876/1,000 | $549 | $1,383 | 2% |
| American Family | 889/1,000 | $592 | $1,627 | 2% |
| Travelers | 871/1,000 | $477 | $1,447 | 2% |
Pros and cons of a small insurance company
| Pros | Cons |
|---|---|
| May be assigned a personal agent | Potentially not as financially stable |
| Your agent knows your area | Customer service may be less available |
| Supporting a local small business | Less online self-service options |
Pros
Possibility of more personalized attention
There is a greater likelihood of getting the “personal touch” with a smaller company. Since they are usually staffed by local agents, you probably have a name of someone to call when you have questions or need help with a policy and they may remember you without prompting.
Your agent knows your area
When you insure with a local agency, you can rest assured that your agent is familiar with your area. When you call a large insurance company, the agent you speak with may not live in your state or even the same part of the country as you. Knowing the local area can help your agent stay on top of insurance or claims trends.
If the business is locally owned your money may stay in the community
To some people, where their money goes is an important factor in the companies they choose to do business with. With a smaller, locally owned insurance agency or company it’s possible that the money you spend will be put back into the community you live in. You will also be supporting job growth in your area.
Cons
Potentially not as financially stable
Many smaller companies may not have the financial stability of a larger company. This is due to the smaller amount of money coming in. They also may not have access to as much reinsurance as a large company has.
Customer service may be less available
Your local agency may not be as busy as a large call center so they may answer the phone quicker, but they probably won’t be available 24/7 like a large company usually is.
Less online self-service options
Smaller, local insurance companies might not have a customer-friendly website or mobile app that you can use to service your policy.
Pros and cons of a large insurance company
| Pros | Cons |
|---|---|
| Higher likelihood of financial stability | Less personal attention |
| More online self-service options | May need multiple agents for all of your different policies |
| 24/7 customer service is likely | Potential for long hold times |
Pros
More likely to be financially stable
Larger companies have more capital to pull from, deeper pockets and usually, a longer history. This makes them more likely to be financially stable, which is vital for its ability to pay out claims in a timely manner.
More online self-service options
Large insurance companies are more likely to have more resources to create online self-service options like a website or mobile app that allows you to make policy changes. A large insurance company may also offer digital ID cards. These digital tools can make it easier for you to manage your policy.
24/7 customer service
Larger companies are more likely to have 24/7 service. Around-the-clock service can be important for those who work tight schedules or for policyholders who want reassurance that an agent will always be available in case of a claim.
Cons
Less personal attention
Since you never know who you will get on the phone or if you are dealing strictly with an online portal, a larger company may provide less personal attention for your liking.
May need multiple agents for all of your different policies
Many large companies have separate departments dedicated to each type of policy. For instance, you may need to be transferred to multiple agents if you want to handle your homeowners insurance and auto policy in one phone call.
Potential for long hold times
Although a large insurance company may be open 24/7, that doesn’t mean they will always have the capacity to answer the phone immediately. This is especially true during claims-heavy times, like after a natural disaster.
Which one should I choose?
Instead of focusing on the size of a company, the best approach is to evaluate what is most important to you when making your decision. Once you know what works best for your lifestyle and driving needs, then you can narrow down your options. For example, if strong customer service is your top priority, then choosing a carrier with high customer service ratings with J.D. Power might be the way to go.
Other aspects to consider include financial strength ratings, such as those through AM Best and S&P, which rate a carrier’s historical ability to payout claims. If digital tools are a higher priority than talking on a phone with a local agent, then keep this in mind when choosing. Overall, selecting the right carrier comes down to which one provides the coverage you need, while balancing customer service, digital assets, financial strength and budget.
