When you shop for car insurance, you might discover that the big companies don’t always have the best rates, coverage, or service for you. In this case, the best insurance for you may come from a small car insurance company or one that’s specific to your area, like a local Farm Bureau affiliate.
Since there are plenty of pros and cons for small car insurance companies, and each one is different, you should always compare rates before buying to be sure you find the best deal.
Pros of small car insurance companies | Cons of small car insurance companies |
|---|---|
May offer unique types of insurance that other companies don't have | Can be harder to find information about coverage |
More personal relationships with agents | Less likely to have 24-hour service or online tools |
Rates can be cheaper than with larger companies | Coverage may only be offered in a few states |
Are small car insurance companies better?
Small car insurance companies can sometimes be better than larger insurance companies, but it depends on your budget, coverage needs, where you live, and other factors that vary for everyone.
A small car insurance company can be better for you if you need unique coverage, like classic car insurance or insurance for expensive exotic cars. Small companies can specialize in providing coverage to certain groups of drivers and can do it better than bigger competitors.
A small car insurance company can also be better for you if you’re looking for a specific kind of coverage. If you want to try usage-based insurance, which bases your rates on how you drive, a smaller, newish company like Lemonade or Root may be more likely to have what you want than a larger car insurance company.
Cost of car insurance from a small insurance company
While many of the cheapest car insurance companies are smaller, large car insurance companies have cheaper average rates than smaller ones overall.
The average cost of car insurance among the 10 largest car insurance companies is $136 a month. That’s $683 cheaper per year than average among the companies ranked 15 to 25 by size.
We also found that the average cost of car insurance for high-risk drivers is more expensive at small insurance companies than large ones.
Clean record | DUI | At-fault accident | Speeding ticket | |
|---|---|---|---|---|
Small car insurance companies | $164 | $336 | $257 | $236 |
Large car insurance companies | $136 | $224 | $202 | $178 |
Difference | $389 | $1,350 | $665 | $696 |
Customer service at small car insurance companies
Small car insurance companies can offer more personalized service than larger competitors, especially if the company has local offices. A small or local car insurance company may also work harder to keep you happy since they have fewer policyholders to worry about than larger companies.
According to the National Association of Insurance Commissioners, many small car insurance providers, including MAPFRE, COUNTRY, Farm Bureau, NJM, and others, receive far fewer complaints than average.
That personalized service can sometimes come at the cost of convenience. Small car insurance companies don’t always have things that you’d find at most big companies, like mobile apps, 24/7 availability when you need to make a claim, or even useful websites or online quote tools.
How to get cheaper insurance from a small company
There are some simple steps that you can take to find the best rates from a small car insurance company:
Compare quotes from different companies: There are lots of small car insurance companies out there, so get quotes from at least a few options to find the most affordable rates.
Bundle your car insurance: Small car insurance companies usually offer a discount if you bundle your car insurance with another policy, like your home, renters, RV, or motorcycle insurance.
Get the right amount of coverage: You can keep your rates low by dropping full-coverage on older cars or not adding endorsements you don’t need.
Avoid accidents and driving violations: Having accidents, past claims, and driving violations on your record can make your rates much more expensive.
Improve your credit score: It can be hard work, but paying down your existing credit card balances and not taking out new loans can lead to lower car insurance rates.
Re-shop your policy before renewal: Make sure to check rates with other small insurance companies when it ’s time to renew so your insurance stays affordable.
List of small car insurance companies
There are hundreds of licensed car insurance companies in the United States, which makes it impossible to list all of the small and local companies that may be available in your area.
We put together a list of the insurance companies ranked 15 through 50 by market share.
Rank | Company |
|---|---|
15 | CSAA |
16 | Mercury |
17 | The Hartford |
18 | Auto Club (Michigan) |
19 | Sentry |
20 | MAPFRE |
21 | The Hanover |
22 | Amica |
23 | COUNTRY Financial |
24 | Shelter |
25 | Alfa |
26 | Southern Farm Bureau |
27 | NJM |
28 | Markel |
29 | Texas Farm Bureau |
30 | Chubb |
31 | Tennessee Farm Bureau |
32 | North Carolina Farm Bureau |
33 | Home State Insurance |
34 | Palisades |
35 | Cincinnati Financial |
36 | Consumers County Mutual |
37 | Kentucky Farm Bureau |
38 | Iowa Farm Bureau |
39 | Grange Mutual |
40 | Incline Insurance |
41 | Fred Loya |
42 | Root |
43 | Plymouth Rock |
44 | Wawanesa |
45 | Brookfield |
46 | Tokio Marine |
47 | Arbella |
48 | Westfield |
49 | NYCM |
50 | Safety |
Frequently asked questions
Do small companies usually offer cheaper insurance?
It’s no sure thing that small car insurance companies will always have cheaper insurance than larger companies. A small car insurance company’s rates may be cheap compared to the national average but that doesn’t necessarily mean it will be a cheap option for you.
How can I be sure a small car insurance company can pay my claim?
A company’s financial stability rating from third-parties like A.M. Best or Moody’s can help you feel more confident that a small company will be able to pay for a future claim you make, although not all small companies are rated.
Are small car insurance companies safe?
While you should always be wary of financial scams, it’s usually safe to get car insurance from a small company if you find a good rate. Be sure to double check reviews before you give any of your personal information.
