Are the biggest auto insurance companies the best?

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Things to Remember...
  • The size of an insurance provider is not necessarily an indicator of quality service
  • Check out an insurance provider’s reputation and reliability before purchasing with them
  • Using an independent agent can be a helpful resource when choosing an insurance company

When it comes to purchasing auto insurance, the size of the insurer is not necessarily the most important factor.

Instead, what really matters is the company’s record of reliability. The consumer needs to determine the likelihood that any insurance claim they make in the future will be paid.

Without a strong likelihood of paid claims, the insurance simply isn’t worth the expense.

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Big vs. Small Auto Insurance Agencies

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Large vehicle insurance companies offer many advantages to the consumer.

Among them are:

  • High visibility
  • Competitive rates
  • A large network of agents and customer service centers
  • Solid insurance coverage that offers excellent protection

Nonetheless, a small insurance company may also provide a superior product.

Small companies typically have lower overhead, and they are usually able to charge less for their services.

Overall, policies purchased from a small insurer tend to be:

  • Highly personalized
  • Less expensive
  • More flexible

Comparing Large and Small Insurers

 

When shopping for vehicle insurance, it is an excellent idea for the consumer to perform some comparisons between large and small insurers.

Auto insurance comparison websites make the comparison process personalized, quick, and free.

When comparing insurance companies large and small, consumers need to compare similar coverages.

The consumer needs to know precisely how much coverage they require for each of the components of their policy.

Things to consider when deciding coverage amounts include:

  • State regulations that dictate minimum insurance coverage
  • What coverage is available in a current insurance policy
  • Whether or not collision and comprehensive coverages are necessary

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Interview Insurance Agents

While going through the comparison shopping process, it makes sense for the consumer to have at least a couple of face to face meetings with agents.

Essentially, two types of agents exist in the insurance world:

  • One agent represents a particular insurer and only sells policies for that insurer
  • The other agent is independent and takes on the role of a broker

Agents who are dedicated to a particular company are excellent at their jobs and exceedingly knowledgeable. However, they are limited by the fact that they can only sell policies that are offered by that single company.

A broker, on the other hand, can sell policies from a number of different insurers. In many cases, this represents an opportunity for the consumer to get the best possible coverage at the best rate.

The independent nature of the insurance broker makes it possible for them to remain on the lookout for a better deal for their clients.

Only Thorough Research Can Help Consumers Find the Best Deal

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Despite the flexibility inherent in dealing with an independent broker, it nonetheless makes sense to meet with one or two brokers and perhaps even an agent who is dedicated to one insurance company.

Keeping in mind that insurance is most useful when an accident or other problem occurs, check out each potential insurer’s track record.

Many different professional organizations track the performance of the major insurance companies and can prove to be valuable resources.

Unbiased ratings and customer reviews are valuable when choosing an insurance company.

Finding performance data on smaller insurers can be more challenging because their statistics are not always tracked by national insurance organizations.

Still, word of mouth can be helpful. A cheap local auto insurance company that gets glowing reviews from friends and neighbors of the consumer may still be an excellent choice.

When a Smaller Insurance Agency Makes Economic Sense

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If a consumer rarely expects to need to file a claim, then a smaller insurer can still work for them.

The consumer who drives fewer than 8,000 miles per year, has an excellent driving record, and little or no history of making claims can discover a great deal with a small insurance company.

Understanding the difference between the services offered by large and small insurance companies can help consumers make a wise, informed decision.

Enter your ZIP code into our FREE auto insurance comparison tool to see rates and coverage options for you right now!

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