Small Car Insurance Companies: Why Pick OneApril 28, 2016
You can probably hum the Allstate “Like a Good Neighbor” jingle. You know Flo works for Progressive and GEICO’s pitchman is small and green. That’s because large insurance companies have millions (or billions, in GEICO’s case) to spend on advertising and marketing, while small insurance companies don’t.
But that doesn’t mean small car insurers are a bad choice. On the contrary, you may get more personal service or lower rates than the big guys can offer. We’ll take a look at some of the advantages and disadvantages of going with a smaller insurance company.
Advantages of Small Car Insurance Companies
Lower rates: Because small car insurers spend less on marketing and have lower overhead costs, they often can provide lower-cost policies — especially for high-risk drivers.
Customer service: The largest companies insure tens of millions of drivers. No matter how many customer service representatives they hire, you’ll still be one customer out of 10,000,000. Smaller, regional companies often beat the big companies in customer satisfaction, according to J.D. Power’s 2013 auto insurance study.
Specialty car insurance: If you’re trying to insure an unusual or collector car, you may have better luck going with a small insurer that specializes in such policies.
Disadvantages of Small Car Insurance Companies
You get what you pay for: If you choose a smaller car insurer because you want to save money with a low-cost policy, review the details carefully. The less you spend, the less coverage you’ll get — which could be disastrous if you get into an accident.
Fewer features: Large car insurers are competing to offer all kinds of perks for policyholders, from affinity group discounts to free roadside assistance. Small companies can’t always match these.
Limited coverage area: Some small car insurance companies only offer policies in a few states. This means if you move, you’ll have to find a new insurer.
Meet Some Smaller Car Insurers
Choosing a car insurance company is a big decision. You should consider the affordability of their premiums, read customer reviews and research what’s covered by the policy. The A.M. Best Company rates insurance companies’ financial stability.
Here are a few smaller car insurance companies and the special services and benefits they offer.
Founded in 1907, Amica Insurance is the oldest mutual insurer of automobiles in the country. Mutual means that the company’s customers are also its owners, so the company pays dividends to policyholders that, for the last 40 years, have equaled 20 percent of their annual premium. Amica prides itself on its award-winning customer service and financial strength.
ANPAC (American National Property And Casualty Company)
ANPAC is a small insurer that specializes in covering classic and antique cars, hot rods and exotic cars worth $100,000 or more. ANPAC’s classic-car insurance includes multi-car discounts, a local agent and even coverage for spare parts.
Elephant Auto Insurance
While Elephant Auto Insurance is a newer company, founded in 2009, it’s no lightweight: It’s a subsidiary of Admiral Group, plc, which has nearly 2 million policies worldwide. Elephant offers no-hassle service, affordable rates and reliable coverage.
The General Insurance (The General Automobile Insurance Services, Inc.)
The General primarily serves drivers who have a history of driving violations or accidents, have let their insurance lapse or have less than perfect credit. These drivers are higher-risk and so may be more expensive to insure, but The General promises affordable premiums and flexible payment plans. The General can also help with SR-22 filings when states require high-risk drivers to provide proof of insurance.
Infinity Auto Insurance
Founded in 1955, Infinity Auto Insurance offers affordable coverage to drivers who may be declined by other insurers because of DUIs, car accidents, and/or moving violations. While Infinity is a small company, it’s the third largest non-standard insurance agency in the U.S., operating in 44 states.
Regional Insurance Companies
These smaller car insurers operate only in specific states or regions — but in those areas, they’re top-ranked for customer satisfaction, according to the 2013 J.D. Power study.
- Wawanesa is a Canadian insurance company that operates in California and Oregon.
- New York Central Mutual (NYCM) is a mutual insurance company in New York.
- PEMCO is a mutual insurance company in the Pacific Northwest.
- Texas Farm Bureau Insurance insures cars, as well as livestock and ranches, in Texas.
- Farm Bureau Insurance of Tennessee was founded by farmers in 1948 and is now the biggest car insurer in Tennessee.
Save Money by Considering Smaller Insurance Companies
A smaller insurer has just as much to offer as a larger insurer. Just because you don’t recognize the name doesn’t mean that they are cheap, untrustworthy, or a scam. If you don’t recognize their name, look them up online.
Don’t pass up the chance to save money by considering a smaller insurance company. Studies show that drivers save an average of 32% on auto insurance when they compare prices and there’s more to compare when you consider local and regional insurance companies. Compare quotes right now and see if a smaller insurer could save you money.
Compare Auto Insurance Quotes from compare.com
Buying auto insurance can be a confusing and disoriented process. We want to make sure that our users can make informed choices about their car insurance, selecting from as many options as possible. Read our Auto Insurance Buying Guide to educate yourself before you start a quote.