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The numerous options lead to a myriad of different questions such as how to choose the best company, who has the lowest rates, and who has the best policy for your needs.
The good news is that there are quite a few reputable and successful auto insurance companies that sell products that you can afford.
Keep reading, and we will discuss some of the more reputable auto insurance companies, what makes them successful, and how to choose among several companies when their rates are relatively the same.
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State Farm Auto Insurance Company
We are starting with State Farm (click here to read the State Farm Auto Insurance Review), not because it has the highest rankings in terms of service, but because they are the company that has written the most auto insurance policies in the US.
As of 2010, State Farm had nearly 20 percent of the market share for auto insurance. If you consider that there are dozens of car insurance companies with seven companies taking up the top 50 percent of the market share, 20 percent is quite significant.
State Farm’s market share has steadily increased over the years despite the arrival of companies such as Progressive and Geico, who have both quickly taken their share of the insurance market.
State Farm has been doing business since 1922. The company was started to provide affordable insurance options to farmers, who were paying city driving prices for their insurance although they were only driving in the country where risk is much lower.
Today State Farm currently handles 35,000 claims every day. One of the things that they are known for is their quick turn around on paying claims.
Allstate Auto Insurance Company
Allstate currently carries about 10 percent of the market share regarding car insurance.
Allstate was founded in 1931. What many people don’t know is that Allstate was a part of the Sears, Roebuck & Co franchise and was publically traded in 1993. Their attachment to the Sears name was what allowed Allstate to grow so quickly.
Allstate was the first company to offer accident forgiveness to drivers with a clean driving history.
While Allstate typically has slightly higher prices than other companies, they do pay back their drivers for maintaining a good driving record and staying accident-free.
Geico Auto Insurance Company
Geico, however, currently holds this spot with about eight percent of the market share.
Geico was founded in 1936 as a company that sold insurance policies to government based employees, including people in the military.
Today, Geico provides insurance options for people in all walks of life.
Geico is best known for their very low prices; however, you won’t find local Geico agents in every state and their policies can be more limited.
For example, your insurance won’t cover rental cars. In addition, only the drivers listed on your policy can drive your vehicle, no exceptions!
Progressive Auto Insurance Company
Founded in 1937, Progressive has long been about customer satisfaction. Progressive has the distinction of being an insurance company that is known for paying their claims.
Progressive is also known as an affordable auto insurance company but with a little more flexibility than companies like Geico.
For example, when you drive a rental car you are covered under your plan, and you are allowed to let others drive your vehicle occasionally and still be covered.
Nationwide Auto Insurance Company
Nationwide was founded in 1925 and, although very well known, is a smaller company when it comes to auto insurance sales.
Their current market share is less than 5 percent. This doesn’t mean that they aren’t a good auto insurance company, only that they hold less of this market.
Nationwide is best known for their excellent business insurance options. They are often the first choice for fleet auto insurance as well as other business insurance products.
Liberty Mutual Auto Insurance Company
Their market share for auto insurance is less than 2 percent, but they still sell millions of policies every year. They just aren’t predominately auto insurance policies.
Liberty Mutual is known for their flexibility with their customers. If you don’t enjoy talking to an agent then you can do all of your business, from choosing an insurance product to making a claim, online.
Travelers Auto Insurance Company
Despite the fact that Travelers claims less than 2 percent of the auto insurance market share, they are best known for innovating and changing the way that auto insurance is sold.
Travelers was the first to require their agents to become trained and licensed in their products before being allowed to sell them.
Travelers was also the first company that offered a hotline for customers to call when they had a claim.
AAA Auto Insurance Company
AAA was founded in 1902 in Chicago, Illinois. Today AAA has over 52 million members.
AAA has less than a 1 percent market share for auto insurance.
A major reason for this is that AAA isn’t known for their auto insurance products; they are known for the emergency services that they provide to their members.
Defining the Best Auto Insurance Companies
There are several factors that determine the success of an auto insurance company. One definition of success is the length of time a company has been in business.
As you can see from the list above, all of the insurance companies listed above have been doing business for 50 years or longer.
There is no denying that staying in business for the long term is an amazing feat for an insurance company.
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Another way to define the success of an insurance company is by how others rate them. Customer satisfaction is important, especially for people looking to make a change from their current insurance company.
Each of the companies listed above has excellent customer ratings, not just for auto insurance, but for the other products that they sell as well.
The companies with the highest market share consistently rank higher for customer service as well as claims paid.
Auto Insurance Companies and Financial Ratings
Financial success is also an important aspect of choosing a successful insurance company.
There are several financial rating companies that rank insurance companies based on their financial information, claims, growth and so on.
These companies use this information to determine how sound a company is and what their long-term outlook is.
Here are the AM Best rankings for each of these companies:
- State Farm – A++ with a long-term stable outlook
- Allstate – A+ with a long-term stable outlook
- Geico – A++ with a long-term stable outlook
- Progressive – A+ with a long-term stable outlook
- Nationwide – A+ with an overall negative long-term outlook
- Liberty Mutual – A with an overall negative long-term outlook
- Travelers – A+ with a long-term stable outlook
- AAA – A+ with a long-term stable outlook
A++ is the highest rating a company can receive from AM Best. As you may have noticed, there are a couple of companies with an overall negative long-term outlook. This could mean many things, but doesn’t necessarily mean that the company is going to fail.
In some cases, this means that the company is growing too fast and that it needs to slow down and let its assets catch up with its growth.
It could also mean that the company recently lost too many policies making it difficult to maintain its current claim influx.
Of course, it could also mean that the company is failing, but a long-term outlook typically means years, not months.
With companies like Nationwide and Liberty Mutual, you will find that the negative outlook will likely turn around in a year or so. However, this does depend on the economy and how things go overall for the company.
Choosing the Right Auto Insurance Company
Often, you will find that when you receive your auto insurance quotes, they will be for similar amounts from each company.
Consider each of the company’s other assets before making your choice.
- One of the things you may want to consider when this happens is the company’s financial status. You may feel more comfortable with a company with an A++ rating and a stable outlook than with a company with a negative outlook.
- Another thing you will want to consider is whether or not you will have a teen driver soon. Some companies offer lower discounts for teens, but you should get quotes from each company again with the teen driver added to your policy
- If you frequently rent vehicles, then a company like Geico may not be the best choice, especially if you rent a car for weeks at a time. The cost of buying insurance through a car rental company can range between $16 and $30 a day.
- Don’t forget to consider customer service ratings for each company. A company may have low rates but bad reviews regarding their customer service. If how you are treated is important to you, then this is something to keep in mind.
What’s more, you need to talk to your friends, family and coworkers about the insurance company that they use. Just because a company has low ratings nationally doesn’t mean they have low ratings locally.
Take time to visit your states’ Department of Insurance as well. You can find a list of insurance companies that are licensed to sell insurance in your state as well as a list of any legitimate complaints that have been filed against them.
The bottom line is that top-rated companies are rated so for a reason — they have consistently provided excellent service and products to their customers.
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