The car insurance industry in the U.S. is gigantic. Some carriers operate in all states but many do not. In fact, the car insurance industry is more divided than one might think. There are companies that insure just about any vehicle for personal use and then there are companies that will insure just about any vehicle for commercial use. There are even some specialty companies who only insure “classic” or “exotic” cars
and a few that specialize in “kit cars”. If it has 4 wheels and a motor, there is going to be an insurance company out there that will sell you protection for your vehicle whether it’s required in your state or not. But, like in every other industry, there are some companies that do much better than others and always find their way to the top. So then, how do we decide who the best car insurance companies
are? Should we consider rates, customer service, claims service, or financial stability? Actually, we should consider all those attributes and the best way to separate the cream of the crop from the “also-rans” is by looking at their market share.
Top 25 Car Insurance Companies by Market Share
|Rank||Insurance Company||A.M. Best Rating||Headquarters||Website |
|1||State Farm||A++||Bloomington, IL||www.statefarm.com |
|2||Berkshire Hathaway (GEICO)||A++||Omaha, NE||www.geico.com |
|3||Progressive||A+||Mayfield, OH||www.progressive.com |
|4||Allstate||A+||Northbrook, IL||www.allstate.com |
|5||USAA||A++||San Antoniio, TX||www.usaa.com |
|6||Liberty Mutual||A||Boston, MA||www.libertymutual.com |
|7||Farmers Insurance||A||Woodland Hills, CA||www.farmers.com |
|8||Nationwide||A+||Columbus, OH||www.nationwide.com |
|9||American Family||A||Madison, WI||www.nationwide.com |
|10||Travelers||A++||Saint Paul, MN||www.travelers.com |
|11||AAA Insurance||A+||Costa Mesa, CA||www.aaa.com |
|12||Erie Insurance||A+||Erie, PA||www.erieinsurance.com |
|13||Kemper||A-||Chicago, IL||www.kemper.com |
|14||National General||A-||New York, NY||www.nationalgeneral.com |
|15||CSAA Insurancec||A||Walnut Creek, CA||csaa-insurance.aaa.com |
|16||Auto-Owners||A+||Lansing, MI||www.auto-owners.com |
|17||Mercury Insurance||A||Los Angeles, CA||www.mercuryinsurance.com |
|18||MetLife||A+||New York, NY||www.metlife.com |
|19||The Hartford||A+||Hartford, CT||www.thehartford.com |
|20||Auto Club Insurance||A++||Dearborn, MI||www.aaa.com |
|21||Amica Mutual||A+||Lincoln, RI||www.amica.com |
|22||Hanover Insurance||A||Worcester, MA||www.hanover.com |
|23||Country Financial||A+||Bloomington, IL||www.countryfinancial.com |
|24||NJM Insurance||A+||West Trenton, NJ||www.njm.com |
|25||Southern Farm Bureau||A+||Ridgeland, MS||www.sfbcic.com |
It’s important to note that not all of the companies listed above will be doing business in every state. Some companies, even with a large market share, are considered regional carriers and operate only in the states nearest their home office. Additionally, some car insurance companies
require the applicant be a member of an organization like AARP, AAA Auto Club, or the Military.
Finding the Lowest Car Insurance Rates
Auto insurance rates are typically based primarily on three rating factors:
- The types of coverages, limits, and deductibles you prefer – Certainly, buying just liability insurance to satisfy your state’s insurance requirements is going to cost much less than buying full coverage with high liability limits on a new Corvette.
- The type of vehicle or vehicles you are insuring. – This part of the rating is actually based on two separate factors of the vehicle(s) you own. For example, vehicles with all the current safety features will have lower liability rates than older models with only seatbelts in the front. Secondly, since the comprehensive and collision rates are based on the actual cash value of the vehicle at the time of a claim, it will cost more to insure a luxury vehicle than it would to insure a family sedan.
- Drivers listed on the policy. – Car insurance underwriting also includes information about the drivers in your household. This underwriting information includes each driver’s age, marital status, driving record for the past 3 to 5 years, insurance score, annual miles driven, and in some cases, the driver’s occupation.
Finding the best car insurance rate is much easier with today’s car insurance calculators
since many brokers, rating services, and company agents use innovative software that can deliver a quote in a matter of minutes or even seconds. It’s important to note, however, that your insurance rate is never final until the company has retrieved the reports needed to rate the drivers on your policy.
Where should I Shop for the Best Car Insurance Rates?
How we shop for car insurance (or any other types of insurance) has changed dramatically over the last twenty years. Certainly, this is the result of the speed of the internet and the innovative software that is available for comparative rating. Virtually anyone with an internet connection or a cell phone can shop their insurance rates with most of the highly-rated companies in a matter of minutes. With your phone or internet connection you can shop your business with all the major companies using three points of access:
- Insurance Companies – In today’s economy there are some insurance companies who prefer to deal directly with the consumer and therefore willing to sell directly to the consumer. These are referred to as direct-writers such as GEICO, Progressive, and Esurance. The drawback for the consumer is that they will be offered only one insurance solution rather than multiple quotes.
- Independent Brokerages – The value of an independent insurance broker is that they will represent many of the top-rated insurance companies but their loyalty will always be to the client or prospective client rather than the insurance company. Brokers are not insurance companies. Instead, they select certain companies to partner with and act as a sales force for those companies.
- Marketplace Aggregators – Marketplace companies typically use innovative technology to rate a prospect with many companies they partner with. Some of these companies actually retrieve the underwriting data and become the agent of record for the policy, but in most cases, these companies hand the prospect off to the company the applicant selects to purchase from. Finally, some of these companies are actually lead generation platforms that collect your basic information and send your data to independent agents who purchase the lead.
The Bottom Line
With the technology available to insurance shoppers today, there is virtually no excuse for consumers who overpay for their car insurance. With only a few minutes of your valuable time, you have the ability to find not only the lowest rates for your car insurance but also know that you are doing business with a financially stable car insurance company who will be there when you need them.