Are the major auto insurance companies better than smaller ones? (Rates + Top Companies)

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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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 14, 2022

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Smaller insurance companies will usually differ from larger insurance companies. Learn more here.

Things to remember...

  • Choosing the right car insurance company can be difficult because there are so many options
  • Larger insurance providers offer more financial stability
  • Smaller insurance companies are often able to give policyholders more individualized attention

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.

Many people wonder whether smaller insurance companies can provide the same insurance products as the well-known insurance providers in the U.S. But the truth is that major auto insurance companies and small car insurance providers both have their benefits.

Are larger car insurance companies better?

The major auto insurance providers in the United States are the companies you’ve seen advertisements for on television and other media forms. The large and popular car insurance providers 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.

Large insurance companies 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.

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What are the most popular car insurance companies?

Many people like to start their search for auto insurance by looking at the bigger names in car insurance coverage. 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.
CompanyAverage Annual Full Coverage RatesMarket Share
State Farm$1,50016%
GEICO$14,01514%
Progressive$15,01213%
Allstate$1,9819%
USAA$1,2326%
Liberty MutualN/A5%
Farmers$2,0164%
Nationwide$1,4962%
American Family$1,9232%
Travelers$1,3372%

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When you look at the table, it can be startling to see the difference in the cost of full coverage from one big-name insurer to the next. 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.

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 do. With no commercial fees or advertising costs, some smaller companies save enough money to offer more affordable car insurance coverage options.

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 smaller insurance companies is where the money goes. For example, suppose you pay your insurance premiums to a small company in your community. 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 a smaller insurance provider?

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 larger insurance providers.

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.

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 car insurance rates in each state.

Average Annual Full Coverage Auto Insurance Rates by State
StatesAverage 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
Oklahomaz$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

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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. 

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.

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. Comparing online quotes from multiple insurance providers will help you see which companies – big and small – offer the most affordable rates.

Once you have narrowed down your search to a few providers, 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.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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