Do small auto insurance companies offer the best rates?

Small auto insurance companies can often offer lower rates, but the cost of coverage can vary widely. Compare quotes to reduce your bill by up to 20%.

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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 and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jul 14, 2021

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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

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Things to Remember...

  • Most states require drivers to have a minimum amount of insurance coverage
  • The issue of insurance rates has always been a major determinant for drivers. These car owners would choose their preferred insurers based on the prices they offer
  • It is difficult to establish the best car insurance company based off these factors alone
  • Big and small auto insurance companies usually distinguish one another by virtue of their pricing

Insurance coverage is an integral requirement for all drivers. It usually manifests its importance when a road accident occurs. In this instance, the people involved in the tragedy would need some medical attention.

Subsequently, the treatment would need finances. Additionally, the damaged cars need mechanical repairs, which also demand money.

Numerous companies specializing in cheap auto insurance plans exist. These firms fall into two broad categories of major and small auto insurance companies.

For instance, small auto insurance companies sometimes operate under the control of the major insurers. Moreover, major insurance companies diversify their services towards all car owners.

Conversely, minor insurers normally target a specific type of drivers. Determining whether major auto insurance companies are better than smaller ones is dependent on a number factors and preferences.

Enter your ZIP code above into our FREE auto insurance comparison tool to find great rates from major and small insurers now!

Pricing in Major and Small Auto Insurance Companies

The issue of insurance rates has always been a major determinant for drivers. These car owners would choose their preferred insurers based on the prices they offer.

Consequently, the Internet has always been a key tool in comparing the quotes of different car insurance companies. Compare online auto insurance companies to get an accurate picture of what insurance companies offer ahead of time. Insurance companies make use of certain factors while setting their insurance premiums.

  • Driving records constitute a pivotal ingredient in setting car insurance rates. People who have a questionable driving record would incur higher rates than those with impeccable reputations.
  • The model of the automobile also plays a key role in determining the insurance rates. Expensive cars would definitely attract higher rates than the cheap ones.
  • Insurance companies would also take the location of the drivers into consideration.
  • The purpose of the car would be a major factor in the insurance rates. In this regard, the parking location would also be a deciding factor.
  • People who drive their cars for long distances enjoy low premiums than long-distance drivers.

Some drivers have understandably developed an affinity for small auto insurance companies because of a number of advantages. Efficient customer service ranks high on this list. These firms are always ready to handle their clients with a personal touch.

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Differences in Insurance Rates Between Major and Small Auto Insurance Companies

Big and small auto insurance companies usually distinguish one another by virtue of their pricing. The small insurance firms usually offer lower rates to their consumers compared to the big companies.

The major auto insurance companies charge high prices for insurance coverage based on certain determinants. These costs usually result from factors such as credit history, car model, and its security features.

Predictably, such a scenario would paint small auto insurance companies in a positive light. Nevertheless, drivers must consider specific ramifications at play:

  • The cheap insurance rates might come to haunt drivers in the event of a road accident. The prices sometimes offer the small auto insurance companies with an effective escape route. Thus, they would be able to refuse to admit liability claiming that they do not cover the claims under their policies. This situation would effectively immobilize the low overhead costs rendering them irrelevant.
  • Most small auto insurance companies lack modalities to cover accidents out of their geographical territories. Therefore, drivers who frequently travel outside these territories would be at a loss in case of accidents. This scenario would normally result in a hefty financial burden for such car owners.
  • Some small auto insurance companies offer discounts as an inducement to their clients. This incentive normally runs for a period of two or three months. Afterward, they would recover the discounted amount in subsequent monthly premiums.
  • Lower rates would sometimes translate to inadequate coverage. Comprehensive and collision coverage poses as the two most important elements in insurance coverage.
  • Cheap rates usually lean towards the need to develop a strong bond between the small auto insurance companies and their customers. Sometimes the rates do not lean towards providing quality coverage to the clients.
  • Drivers should decide on small auto insurance companies depending on their projections of filing a claim. Granted some individuals file fewer claims than others.

Small auto insurance companies stand out as the perfect answer to the question of finding cheap insurance rates. Nevertheless, drivers must balance their desire for affordable premiums with the need for quality coverage.

This means that they should conduct an analysis of their situation to determine their suitability to these companies.

Furthermore, they should conduct thorough research on the quotes and packages present in both big and small auto insurance firms.

To avoid auto insurance trouble, enter your ZIP code into our FREE car insurance comparison tool below to find great rates and coverage together!

Free Auto Insurance Comparison

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

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