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The essence of having coverage is so that the insurer can honor your claims; otherwise, it is not worth your money. Auto insurance price comparisons are the best way to save money and get the right provider to meet your needs. Are the major auto insurance companies the best compared to smaller auto insurance companies? It depends on numerous factors. Figuring out what the best and worst companies are will take time, but will be worth it in the long run.
We’ll cover the advantages and disadvantages of a small insurance companies vs. large auto insurance companies. We’ll let you know which the largest companies in the U.S. actually are, and then help you compare them to smaller options. Plus we’ll answer the age old question: Are major auto insurance companies better than smaller ones?
As a customer or a newbie in the insurance sector, you can benefit greatly from comparison sites. Enter your ZIP code above into the auto insurance comparison tool now to get FREE and reliable quotes from companies large and small.
Table of Contents
The largest auto insurance companies are not necessarily better than smaller ones. There are various other factors you need to consider when buying auto insurance, not just size. As a consumer, you need to make use of comparison tools listed on various websites. Check out: what is the largest auto insurance company in United States territory.
There are numerous advantages of going to major companies. Some of them include:
Due to specialization, smaller firms can offer superior products. Generally, small auto firms have lower overheads, and they are in a position to charge less.
Other benefits include:
As evidenced, both smaller and large companies have their benefits. When conducting your research, it is advisable to compare both big and small insurers. Auto insurance comparison websites make shopping very easy since the process is fast.
It is essential to compare similar coverages offered by both large and smaller firms. Since having insurance is compulsory in some states, it’s imperative to have the right amount of coverage.
When shopping for auto insurance online, it should not be a question of the size of the insurer.
Your primary goal should be to get the coverage that best suits you; you could get it from a larger or smaller provider. It also depends on how you use the car.
For instance, if you travel out of your state frequently, you should consider one of the largest auto insurance companies since they cover accidents that occur in another state. Small ones may have this provision but at a higher rate.
Security is a major concern for most people. Usually, small insurance companies do not appear at the top of rankings. To be the safest insurance company, you must earn billions.
If security and safety is a prime factor for you, then it is better to go for a major company. This way, you can be sure that your claim will be paid in full.
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So, who are the largest auto insurance companies, anyway? You probably know many of the names of the big companies, but let’s take a look at not just the top 5, but the top 10 auto insurance companies in the USA.
The top car insurance companies by market share, according to the National Association of Insurance Commissioners (NAIC) are:
The market share report will provide more information on the top 20 auto insurance companies if you’re seeking a longer list. Of course, market share tells you only how many customers a company has, not how good they are. What are the worst insurance companies? What is the best auto insurance company? Read on for more details on how to choose the right balance of cheap car insurance and great service.
Normally, larger firms can hire more personnel, which means they have round-the-clock customer service to handle any questions and queries you may have. Smaller companies have fewer workers and may not afford 24/7 customer service.
However, you should take the time to read reviews and customer testimonials, as most people will share their experiences regarding customer support and other services.
A larger company does not necessarily mean that they have excellent customer care.
Accessibility is another factor that may differ depending on the size of the firm. Larger companies normally have many ways in which you can contact them when you want to make claims.
Some of these methods include email, website, and free toll numbers. Smaller companies may be limited in this regard. It depends on what is important to you. If these factors matter, then going for a larger company makes more sense.
Speaking of factors that determine car insurance, let’s spend the rest of the section describing the average annual rates determined by different factors in auto insurance.
What you’ll see in the sub-sections below are several average annual rates. These rates are general quotes that reflect a composite annual rate for auto insurance. In other words, these averages are based on average annual rates from big and small auto insurance companies.
These annual rates were put together and divided by the number of companies, presenting data that are illustrated in the data tables in this section.
Auto insurance, regardless of size, will determine your auto insurance rates based on demographics. Demographics can mean several things but our guides demographic entails age, gender, and marital status. The Washington Post reports states like California, North Carolina, and Michigan have outlawed auto insurance rates based on gender, but age and marital status appear to be a factor in an auto insurance policy.
Here’s the first table in this section, which shows the average annual rate of auto insurance based on age, gender, and marital status.
|Age, Gender, and Marital Status||Average Annual Auto Insurance Rates|
|Married 60-year-old female||$2,243/year|
|Married 60-year-old male||$2,308/year|
|Married 35-year-old male||$2,446/year|
|Married 35-year-old female||$2,449/year|
|Single 25-year-old female||$2,703/year|
|Single 25-year-old male||$2,889/year|
|Single 17-year-old female||$7,559/year|
|Single 17-year-old male||$9,028/year|
Insurance for teen drivers is the most expensive rate in this data table. Auto insurance for teen drivers is more expensive because teen drivers are more at risk of getting into an accident. According to auto insurance experts and annual statistics, single and young drivers are likely to be in an accident than those who are 25 and older.
Married drivers pay significantly less for auto insurance. Depending on the company and the state you’re in, your auto insurance rates could be much less than the average shown in the table once you get a personalized quote for auto insurance.
Coverage levels represent coverage limits that increase the maximum amount of money that will cover bodily injury and property damage liabilities. Each state in the U.S. has different coverage limit amounts. The base minimum requirements are known as the state minimum and may be considered the low coverage level limit.
Auto insurance companies may suggest a higher coverage limit based on the average value of vehicles, claims, or overall cost of accidents in your area. Generally, the medium coverage level has a coverage rule of 50/100/50 (100/300/100 in some states and companies).
Coverage rules are coverage limit summaries of the bodily injury liability and property damage liability.
An example of a coverage rule is a state that a minimum requirement that says $25,000 for bodily injury of one person per accident, $50,000 for bodily injury of multiple people per accident, and $25,000 for property damage per accident. This coverage rule can represent a state’s minimum coverage limit.
In some states, what happens after an accident without insurance can differ by state. Uninsured motorist and underinsured motorist coverages are included in the minimum requirements. Here’s a summary from the Insurance Information Institute that shows the summary of coverage rules in each state in the U.S.
|States||Coverage Types||Coverage Limits|
|AL||BI & PD Liab||25/50/25|
|AK||BI & PD Liab||50/100/25|
|AZ||BI & PD Liab||15/30/10|
|AR||BI & PD Liab, PIP||25/50/25|
|CA||BI & PD Liab||15/30/5|
|CO||BI & PD Liab||25/50/15|
|CT||BI & PD Liab, UM, UIM||25/50/20|
|DE||BI & PD Liab, PIP||25/50/10|
|DC||BI & PD Liab, UM||25/50/10|
|FL||PD Liab, PIP||10/20/10|
|GA||BI & PD Liab||25/50/25|
|HI||BI & PD Liab, PIP||20/40/10|
|ID||BI & PD Liab||25/50/15|
|IL||BI & PD Liab, UM, UIM||25/50/20|
|IN||BI & PD Liab||25/50/25|
|IA||BI & PD Liab||20/40/15|
|KS||BI & PD Liab, PIP||25/50/25|
|KY||BI & PD Liab, PIP, UM, UIM||25/50/25|
|LA||BI & PD Liab||15/30/25|
|ME||BI & PD Liab, UM, UIM, Medpay||50/100/25|
|MD||BI & PD Liab, PIP, UM, UIM||30/60/15|
|MA||BI & PD Liab, PIP||20/40/5|
|MI||BI & PD Liab, PIP||20/40/10|
|MN||BI & PD Liab, PIP, UM, UIM||30/60/10|
|MS||BI & PD Liab||25/50/25|
|MO||BI & PD Liab, UM||25/50/25|
|MT||BI & PD Liab||25/50/20|
|NE||BI & PD Liab, UM, UIM||25/50/25|
|NV||BI & PD Liab||25/50/20|
|NJ||BI & PD Liab, PIP, UM, UIM||15/30/5|
|NM||BI & PD Liab||25/50/10|
|NY||BI & PD Liab, PIP, UM, UIM||25/50/10|
|NC||BI & PD Liab, UM, UIM||30/60/25|
|ND||BI & PD Liab, PIP, UM, UIM||25/50/25|
|OH||BI & PD Liab||25/50/25|
|OK||BI & PD Liab||25/50/25|
|OR||BI & PD Liab, PIP, UM, UIM||25/50/20|
|PA||BI & PD Liab, PIP||15/30/5|
|RI||BI & PD Liab||25/50/25|
|SC||BI & PD Liab, UM, UIM||25/50/25|
|SD||BI & PD Liab, UM, UIM||25/50/25|
|TN||BI & PD Liab||25/50/15|
|TX||BI & PD Liab, PIP||30/60/25|
|UT||BI & PD Liab, PIP||25/65/15|
|VT||BI & PD Liab, UM, UIM||25/50/10|
|VA||BI & PD Liab, UM, UIM||25/50/20|
|WA||BI & PD Liab||25/50/10|
|WV||BI & PD Liab, UM, UIM||25/50/25|
|WI||BI & PD Liab, UM, Medpay||25/50/10|
|WY||BI & PD Liab||25/50/20|
All of the coverage levels represented are minimum coverage rules. If a policyholder or potential customer wanted a higher coverage level they would ask their agent during the quote and enroll process.
Finally, let’s examine the average annual rates based on coverage level. Again, these coverage level rates are averages based on the annual rates from companies across the U.S.
|Coverage Level||Average Annual Auto Insurance Rates|
See how the low coverage level is the cheapest car insurance. As you progress in coverage level, the annual rate becomes more expensive. With a coverage level, it guarantees that a no-fault driver will be taken care of after an accident. To offset the cost of expensive insurance, it may be helpful to enroll in full coverage. We’ll talk more about that later.
During the quote process, an auto insurance provider will ask you what your vehicle is being used for. Motor vehicles that are used for work commute are vehicles that you’ll use frequently and auto insurance companies will estimate that you’re travel in that vehicle for 12,000 miles or more. For pleasure vehicles, they could estimate that you’ll drive roughly 6,000 miles or less during the duration of the policy.
The data below shows the average annual rate based on estimated commute mileage during a policy.
|Estimated Commute Mileage||Average Annual Auto Insurance Rates|
6,000 annual mileage
12,000 annual mileage
Typically, the fewer miles you’re estimated to drive, regardless of what you use your vehicle for, will save you money on your auto insurance policy. Some companies don’t issue higher rates based on estimated commute mileage.
When you go get a quote from any insurance company, they will run a credit check. Your credit score should not be affected when they examine it.
Why do insurance companies need to know my credit history? Credit experts say that a person’s credit history affects car insurance rates and describes the risk of insuring a policyholder. Before getting into the details of why that is, let’s look at the average annual rates based on credit.
|Credit History||Average Annual Auto Insurance Rates|
|Good Credit Score||$3,166/year|
|Fair Credit Score||$3,687/year|
|Poor Credit Score||$5,151/year|
Those with poor credit pay the most for auto insurance. Auto insurance providers don’t issue these rates to punish those with fair and poor credit. Providers see poor credit policyholders as a higher risk to insure, so they issue rates to those that correlate to increased risk.
Policyholders with good credit, however, pay significantly less. Most auto insurance companies provide discounts to policyholders with good credit, which is why the average annual rate in the data is cheaper than the other two values.
All potential customers and policyholders can check their insurance claim history. This is the history of how you as a consumer have dealt with insurance providers in the past. Those with little to no claims and successful timely payments are in good standing in personal insurance. However, if you’ve hit nonpayment bumps or dealt with cancellations in the past, auto insurance companies may see you as a liability to insure.
Your driving record is a big factor in determining auto insurance rates. Both big and small car insurance companies will need to know your driving record. Lying about your driving record and acquiring a policy based on false information will result in your policy being canceled.
Let’s review the average annual rates based on driving record in the data presented below.
|Driving Record Summary||Average Annual Auto Insurance Rates|
|Clean driving record||$1,896|
|With one speeding violation||$3,669|
|With one accident||$4,100|
|With one DUI||$4,920|
Of course, the cheapest auto insurance rate based on driving record is a policyholder that has a clean driving record. The second cheapest is a driving record with at least one speeding violation. Accidents and DUIs/DWIs on a driving record increase rates considerably.
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Where you live determines your auto insurance rates, also. Like auto insurance coverage limits, average annual rates vary from state to state. Regardless of the size of the auto insurance company, you’ll pay different rates.
Some states present more risks for auto insurance based on statistics such as crime, economy, fatal accidents, and population. Therefore, auto insurance providers will issue rates based on that risk. While some auto insurance companies offer cheaper rates than others, they may be more expensive than other bigger insurance providers or smaller insurance providers.
Here are the average annual rates by each state in the U.S.
|States||Average Annual Auto Insurance Rates|
|District of Columbia||$4,439|
It’s amazing how much one state is much cheaper than the other. Michigan is the most expensive state for auto insurance based on the table, which probably encourages more residents in the state to use public transportation to commute. Auto insurance companies will consider ZIP codes, too.
For more details on the auto insurance rates by ZIP code, check out our state and city auto insurance guides.
Let’s cover one more thing about auto insurance before moving on to the next section. Auto insurance policies are made of several coverages. In states where uninsured motorist, underinsured motorist, personal injury protection, and medical payments are required and often included in liability coverages.
Basic coverages such as liability, collision, and comprehensive coverage are part of the annual rates.
Liability coverage is the minimum requirement for auto insurance, which pays for bodily injuries and property damage the policyholder causes.
Collision coverage pays for property damage regardless of who is at fault.
Comprehensive coverage pays for property damage that does not involve a collision, but accidental damage where the policyholder is not operating the vehicle. An example of comprehensive coverage is an auto insurance provider paying for damages from auto theft, fires, storm damage, flood damage, falling objects, etc.
The information in the summarized data below is from the National Association of Insurance Commissioners (NAIC). Let’s examine the national average for basic coverages.
|Coverage Summary||Average Annual Auto Insurance Rates|
Full coverage is collision and comprehensive coverages in addition to liability. Auto insurance companies adjust full coverage costs during the final quote price for an auto insurance policy. This is due to additional liabilities and other perks that come with full coverage.
Bigger insurance companies are likely to have more options under full coverage, but smaller insurance companies have industry or consumer niche coverages that bigger companies may overlook.
For customers who want specialty insurance that requires special thought, they should consider smaller firms. For instance, if you need a particular type of commercial trucking, the best provider is most certainly a smaller firm.
Larger companies focus their attention on wider policies, which attract a majority of their clients. Generally, they go for the mass, but if you have individual needs such as bad credit, a smaller firm is more likely to cater to your needs.
You cannot expect a large firm to open an office solely devoted to your specifications and needs.
Many customers also want personalized services, which is common among smaller companies. However, for a smaller insurer, you are likely to relate on a name basis with an insurance agent.
According to the Better Business Bureau, personalized services are essential for many customers since they feel that they are valued. One feels great when they are treated like they matter, and if this is what you are looking for, you should definitely enlist the services of a smaller insurance firm.
When shopping for auto insurance, it is important to meet with agents. However, you should remember that there are two types of agents.
One type will only sell products for a particular provider, and the other is independent and more of a broker.
If you need a list of car insurance companies that are the best for you, you can use a broker to help you make an informed decision. The top 10 auto insurance companies in America can offer different options and rates.
At the end of the day, only thorough research with the help of a comparison site will you figure out the best auto insurance company for you. Remember that there are many factors used to gauge the suitability of an auto insurance firm other than size.
Use our FREE auto insurance comparison tool to compare companies of various sizes. Just enter your ZIP code below to get started.
The NAIC keeps a list of all of the auto insurance companies licensed to do business in the United States. Your state’s department of insurance can help you find the insurance companies that operate in your area.
If you want information beyond just the top 10 insurance companies in the USA, the Sovereign Wealth Fund Insititute (SWFI) has a complete list of the 85 largest insurance companies worldwide.
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