The nation’s four largest auto insurers control just over half of the car insurance market: Allstate, Geico, Progressive and State Farm. If you’re shopping for car insurance, you may be wondering if a smaller company can save you money.
The short answer is: Company size doesn’t reflect the ability to offer cheap car insurance, so the best strategy is to shop around.
In some states, such as Florida, the state’s Farm Bureau offers both cheap rates and good customer experience. In California, the cheapest rates can come from The Hartford and Auto-Owners insurance. The companies with the lowest rates can vary within a state and also by the driver. For example, some companies are better at giving good rates to folks with poor driving records.
Because of this wide pricing variation, consider both small and large companies and compare auto insurance quotes to find a deal.
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The risk of small companies
Small insurers aren’t without some risk compared to large insurers. For example, a small company that’s hit by many claims after a natural disaster could go out of business. But even in rare cases like this, the state steps in to guide the process and sometimes even finds a way to correct the insurer’s financial problems.
In cases where the company can’t be saved, the state will advise customers to seek new coverage. For example, Texas ordered the liquidation of Access Insurance Co. in 2018 and thousands of customers had to find new insurance. Access Insurance Co. specialized in non-standard coverage and was licensed in 22 states but became insolvent.