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Small car insurance companies

Small car insurance companies can offer better rates, coverage options, and customer service than larger ones.

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Headshot of Andrew Hurst

By

Rachael BrennanSenior Editor & Licensed Auto Insurance ExpertRachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.&Andrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Edited by

Anna SwartzAnna SwartzSenior Managing EditorAnna Swartz is a senior managing editor who specializes in home, auto, renters, and disability insurance at Policygenius. Previously, she was a senior staff writer at Mic and a writer at The Dodo. Her work has also appeared in Salon, HuffPost, MSN, AOL, and Heeb.

Updated|2 min read

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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.

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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.

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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.

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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

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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.

Authors

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Editor

Anna Swartz is a senior managing editor who specializes in home, auto, renters, and disability insurance at Policygenius. Previously, she was a senior staff writer at Mic and a writer at The Dodo. Her work has also appeared in Salon, HuffPost, MSN, AOL, and Heeb.

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