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Small vs. large insurance companies
Powered by Coverage.com (NPN: 19966249)
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
Choosing between small and large insurance companies
Large insurance companies — the big-name brands you likely recognize from advertisements — write policies on the national level and make up over 75 percent of the market share for private passenger auto insurance. But that leaves a large number of drivers doing business with smaller companies, from regional insurers that operate in a few states to single-state local carriers.
Neither large nor small insurers are the best option for all drivers — but if you’ve only been with one type of insurer, switching to a smaller (or larger) company could come with surprising new benefits. Large, call center-driven insurance companies are more likely to have 24/7 customer service and self-service mobile tools, while smaller companies could give you more personalized service — and in some cases, cheaper premiums.
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 largest companies as they typically offer easily-accessible online quotes. The top 10 largest car insurance companies based on market share represent the majority of drivers in the U.S. To provide a holistic view of these carriers, we also included third-party scores issued in the J.D. Power 2023 U.S. Auto Claims Satisfaction Study, as well as our proprietary Bankrate Scores, which range from 0.0 to 5.0.
| Company | Bankrate Score | J.D. Power score | Average annual minimum coverage premium | Average annual full coverage premium | Market share |
|---|---|---|---|---|---|
| State Farm | 4.3 | 891/1,000 | $702 | $2,364 | 18% |
| Progressive | 4.4 | 870/1,000 | $571 | $1,988 | 15% |
| Geico | 4.4 | 871/1,000 | $459 | $1,741 | 12% |
| Allstate | 3.9 | 882/1,000 | $677 | $2,971 | 10% |
| USAA* | 4.2 | 900 /1,000 | $434 | $1,695 | 6% |
| Liberty Mutual | 3.8 | 866/1,000 | Rates not available | Rates not available | 4% |
| Farmers | 3.8 | 878/1,000 | $955 | $2,838 | 4% |
| Travelers | 4.2 | 871/1,000 | $493 | $1,839 | 2% |
| American Family | 4.2 | 882/1,000 | $567 | $1,806 | 2% |
| Nationwide | 4.0 | 875/1,000 | $752 | $1,853 | 2% |
*USAA is not officially ranked by J.D. Power due to eligibility restrictions
Pros and cons of a small insurance company
Pros of a small insurance company
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Service may be more personalized with a local agent
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Could have a shorter hold time when calling your local agency vs. a regional contact center
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May offer cheaper coverage than a large national carrier
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If the agency is a small business, you could be supporting your local economy by insuring with a neighborhood agent
Cons of a small insurance company
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May be limited to standard business hours if you need help with your policy or have to file a claim
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Local company may not have the same robust digital tools are a larger carrier
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Might not have as much access to reinsurance as a larger company, which could make it less financially stable
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May not offer as many lines of insurance as a larger insurance company
A small insurance company may be right for you if…
- You prefer to handle your insurance needs one-on-one with an agent
- You want to stimulate your local economy by supporting a small business
- You don’t mind being limited to standard business hours for customer service and claims filing
Pros and cons of a large insurance company
Pros of a large insurance company
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Might have more self-service options, like a mobile app and online policy portal that allows policyholders to manage their policies
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Typically has expanded, or even 24/7, customer service hours
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Might be able to purchase multiple lines of insurance with the same company
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Could be more financially stable or better staffed to handle widespread claims after a natural disaster
Cons of a large insurance company
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Likely will deal with a different agent each time you call, and the agent may be located across the country (or in a different country)
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Potential for long hold times
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May be transferred from one department to the next if you need to handle more than one type of policy
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Could be difficult to reach a supervisor or manager if an issue needs to be resolved
A large insurance company may be right for you if…
- You think you will need to get in touch with your agent outside of standard business hours
- You want to purchase another type of policy alongside your auto insurance that is not be available with a smaller company
- You want the peace of mind of being insured with a well-known household name
Should I choose a small or large insurance company?
Just focusing on the size of the company you want to work with may not help you find the best insurer for your needs — after all, you can find good and bad fits at every size. Instead, it may be helpful to start by thinking about your general priorities when it comes to picking an insurer and consider whether a small company or a large one is most likely to be able to meet those needs.
The following questions may help you narrow down the type of insurance company you want to work with:
- Is excellent customer service important to you? If so, you may want to look at carriers that score highly with J.D. Power. Smaller carriers are usually not included in J.D. Power studies, so you may need to speak with existing policyholders to get a sense of their customer experience.
- Do you want an insurer with solid financial strength ratings? AM Best, S&P and Demotech ratings provide insight on historical financial strength.
- Do you prefer to handle your insurance business online? Many larger companies offer robust digital tools and mobile apps which allow you to pay bills, file claims and more.
- Do you want to work with a local agent? Most smaller companies and some larger ones have local offices with agents who understand the needs of your area.
Ultimately, either a small or a large insurance company could check all of these boxes — but understanding your priorities can help you to narrow the field of your search and to evaluate each carrier when you compare rates from the companies you’re most interested in.
Frequently asked questions
Methodology
Bankrate utilizes Quadrant Information Services to analyze April 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Bankrate Scores
Our 2024 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.
Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlighting where they fall short.
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Cost & ratings 50%
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Coverage & savings 30%
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Support 20%
- Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, average quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best, Demotech and the NAIC, were analyzed.
- Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
- Tier 3 (Support): To encompass the many ways an auto insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.
