Choose between small and large insurance companies

When it comes to car insurance companies, drivers have several options to choose from. There are hundreds of car insurance companies to choose from. Some of these companies are massive, with tens of thousands of agents operating primarily out of a call center. Other companies are small independent agencies with only a handful of people working in a local office. Whether or not you decide to insure yourself with a small insurance company or a large insurance company is usually a personal preference. Bankrate has broken down the pros and cons of each to help you find the best insurer for you.

Small vs large insurance companies

Although there are no rules defining small and large insurance companies, small companies are usually the local offices that you find in your community. Large insurance companies, on the other hand, advertise and write policies nationally. A small business is likely only open during normal business hours, while a large business may be open 24/7 with the help of regional call centers. Larger call center-based insurance companies may also have local offices to assist customers who prefer to do business in person, but these local offices are usually in short supply. Geico is an example of a large insurance company with both call centers and limited local offices.

Top 10 largest insurance companies by market share

When comparing multiple quotes from different insurance companies, many drivers find it easier to start with the larger companies. The 10 largest car insurance companies based on market share account for the majority of drivers in the United States

state farm 892/1000 $456 $1,397 16%
Geico 881/1000 $365 $1,297 14%
progressive 862/1000 $542 $1,561 14%
Allstate 870/1000 $558 $2,438 ten%
USAA 909/1000 $354 $1,209 6%
Liberty Mutual 876/1000 Rates not available Rates not available 5%
Farmers 893/1000 $550 $1,524 5%
At national scale 876/1000 $549 $1,383 2%
American family 889/1000 $592 $1,627 2%
Travelers 871/1000 $477 $1,447 2%

Advantages and disadvantages of a small insurance company

Can be assigned a personal agent Potentially not as financially stable
Your agent knows your area Customer service may be less available
Support a local small business Fewer online self-service options

Advantages

Possibility of more personalized attention

There is a greater likelihood of getting the “personal touch” with a small business. Since they usually have local agents, you probably have someone’s name to call when you have questions or need help with a policy and they can remember you without being prompted.

Your agent knows your area

When you insure with a local agency, you can rest assured that your agent knows your area well. When you call a major insurance company, the agent you speak with may not live in your state or even in the same part of the country as you. Knowing the area can help your agent stay on top of insurance or claims trends.

If the business is locally owned, your money can stay in the community

For some people, where their money goes is a big factor in the companies they choose to do business with. With a smaller, locally owned agency or insurance company, it’s possible that the money you spend will flow back into the community you live in. You will also support job growth in your area.

The inconvenients

Potentially not as financially stable

Many small businesses may not have the financial stability of a large business. This is due to the small amount of money coming in. They also may not have access to as much reinsurance as a larger company.

Customer service may be less available

Your local branch may not be as busy as a large call center, so they can answer the phone faster, but they probably won’t be available 24/7 like the is usually a big business.

Fewer online self-service options

Small local insurance companies may not have a user-friendly website or mobile app that you can use to manage your policy.

Advantages and disadvantages of a large insurance company

Greater likelihood of financial stability Less personal attention
More online self-service options May require multiple agents for all your different fonts
24/7 customer service is likely Potential for long holding times

Advantages

More likely to be financially stable

Big companies have more capital to draw from, deeper pockets, and generally, a longer history. This makes them more likely to be financially stable, which is essential for its ability to pay claims in a timely manner.

More online self-service options

Larger insurance companies are more likely to have more resources to create online self-service options like a website or mobile app that lets you make changes to your policy. A large insurance company may also offer digital ID cards. These digital tools can make it easier for you to manage your policy.

24/7 customer service

Large companies are more likely to have 24/7 service. 24-hour service can be important for those on tight schedules or for policyholders who want the assurance that an agent will always be available in the event of a claim.

The inconvenients

Less personal attention

Since you never know who you’ll get on the phone or if you’re dealing strictly with an online portal, a larger company may provide less personal attention to your liking.

May require multiple agents for all your different fonts

Many large companies have separate departments dedicated to each type of policy. For example, you may need to be transferred to multiple agents if you want to manage your home insurance and auto policy in one phone call.

Potential for long holding times

Although a large insurance company may be open 24 hours a day, 7 days a week, that does not mean that they will always have the ability to answer the phone immediately. This is especially true during times of disaster, such as after a natural disaster.

Which should I choose?

Instead of focusing on the size of a business, the best approach is to assess what is most important to you when making your decision. Once you know what best suits your lifestyle and riding needs, you can narrow down your options. For example, if strong customer service is your top priority, choosing a carrier with high customer service ratings with JD Power might be the way to go.

Other aspects to consider include financial strength ratings, such as those from AM Best and S&P, which assess a carrier’s historical ability to pay claims. If digital tools are a higher priority than a phone conversation with a local agent, keep that in mind when choosing. Overall, selecting the right carrier comes down to one that offers the coverage you need, while balancing customer service, digital assets, financial strength, and budget.

Frequently Asked Questions

Kristan F. Talley