What is the best way to determine who the top dog is when it comes to car insurance?
Well, at the end of the day, there are probably more differing opinions than there are insurers. We’re not kidding. Just look at this list of car insurance companies to get but a taste of what’s out there.
But action speaks louder than words…and “action” may be best described as putting your money where your mouth is.
If that’s true, then we need to look at the top 10 car insurers by market share, which means nothing more than who brings in the most insurance premium dollars in the U.S.
Since we pride ourselves on the “truth” here at TTAI, we feel we should point out that the top insurers for market share are also the top advertising insurers in the U.S.
Let’s face it; advertising works…why else would these insurers collectively spend over a BILLION dollars annually to tell you how great they are.
[See how much insurers spend on advertising – the numbers will astound you.]
You don’t have to be in this industry too long to notice how furiously a State Farm customer will defend the integrity of their insurer for no other reason than that they are most familiar with that company – even though they may have never filed an insurance claim in 20 years of being a customer.
Almost any company will take your money for 20 years without actually benefiting you in any manner…and be really nice about it!
Tip: Smaller, “Regional” insurers almost never make it on any of the “Best” lists, as only “National” insurers usually take the stage. But there are some smaller, regional companies out there with the best customer service in the industry.
Just Show Me the Top 10 List
Back to why you’re here in the first place. Let’s look at the list, which is data from 2010 (latest available) from the Insurance Information Institute (III). Don’t let the lag in info bring you down. There probably won’t be too many changes on this list as time marches on.
1. State Farm Mutual – as recently as 2009, State Farm controlled 18.11% of the U.S. car insurance market. Makes you wonder why they aren’t the most cost effective insurer. No wonder they’re asking you to do a “Discount Double-Check.”
2. Allstate – coming in at 10.85%, Allstate is definitely one of the big dogs. Over 10% of the U.S. car insurance market allows Allstate to have a celebrity endorser pitch their product 24 hours per day on every TV and radio station, along with every website on the Internet. And they’ve even got the Allstate Value Plan now for those who can’t afford their normal coverage!
3. GEICO – that lizard is making a lot of money! Warren Buffet’s Berkshire Hathaway (which operates as Geico) has been a contender for years, coming in with 8.64% of the U.S. market share for car insurance in 2009. Mr. Buffett loves the idea of the premium “float,” which is nothing more than money to be used for other investments.
4. Progressive – with their amount of advertising you may have expected to hear a number higher than 7.83% of the market share. This insurer led the way in the non-standard car insurance market. They were the first company to say, “It’s OK if you have a few tickets and accidents.” Of course, this was after the idea of compulsory insurance laws, which mandated that almost everyone had to buy insurance…even those of us who wouldn’t unless it was the law. Progressive is leading the market with their Snapshot™ technology.
5. Zurich Financial Services – you might be asking, “Who?” Here’s a tip. Zurich is Farmers Insurance. Now that you know this, it’s probably not a surprise to you that they “own” a 6.06% share of the market when it comes to car insurance. Just like it’s hard to understand how Ford manufactures Jaguar cars, insurance companies buy and sell one another in order to gain market share and line their pockets.
6. Liberty Mutual – This insurer purchased Safeco Insurance not too long ago, which helped them solidify spot number six with a 4.57% market share. They are probably best known for their Better Car Replacement commercials, which is a unique form of new car replacement.
7. USAA Insurance – we here at TTAI will bet you a shiny nickel that you had no idea that USAA IS NOT affiliated with the United States government or the Department of Defense in any way, shape or manner. They simply market to military service members to earn their 4.39% market share. The advertising certainly works, as a family member of yours may have “earned” the right to buy insurance from this company for their service in the U.S. military…even if that “right” costs you more for the same coverage than a different insurer.
8. Nationwide Mutual – Nationwide comes in at 4.29% market share. You might recognize them from those “hilarious” vanishing deductible television commercials they run on TV constantly.
9. Travelers – did you know that Travelers sold the first car insurance policy in the U.S.? However, that fact may surprise you less than their 2.14% share of U.S. car insurance market. Truth is, they sell their product through independent insurance agents, so they don’t rely too much on the multi-hundred-million dollar advertising budgets employed by some of the higher-ranking members on this list. They simply offer a good product at a reasonable price (i.e. they don’t spend as much of your premium dollars on attracting new customers).
10. American Family Mutual – you might be saying, “Who?” American Family is a HUGE player in the heartland of America (1.97% market share) when it comes to car insurance coverage. There are a lot of people between New York and Los Angeles that need car insurance, and American Family answers the call. They also recently acquired The General Insurance Company to expand their footprint.
All You Need to Know?
Nope, as discussed earlier, there are thousands of insurers in the U.S. that have nothing to do with “top insurer” lists that offer substantially lower premiums for the same or BETTER coverage with fantastic claims service.
This is why you should get insurance quotes from a variety of sources, including a local independent insurance agent, to guarantee yourself the best deal.
It always amazes the TTAI staff that large, “chain” insurance companies have somehow been able to avoid the stigma of other “National” corporations such as Bank of America when it comes to customer satisfaction.
After all, the biggest insurers are not really that much different than the biggest banks…whose primary goal is “increasing shareholder value,” rather than customer service.
Read more: 10 best times to shop your insurance rate.