The Most Profitable Car Insurance Companies and Why


Insurance companies generate profits from the premiums paid by consumers. Also, they get extra income by reinvesting that money into other profit-making assets.

That said, approximately 17 million vehicles are sold in the United States each year. And because every car owner needs to buy insurance coverage, you can see why auto insurance companies are the most cost effective.

Remember that the best auto insurance companies offer varying prices and premium services. And Progressive Insurance reviews show that every great company has its own unique selling point to attract potential consumers.

The most profitable car insurance companies

Before going into details, here is a quick list of the most profitable car insurance companies.

Rank Company Written premiums (billions) Market share (%) best known for
1. state farm $40.4 16 Large agent network
2. Geico $33.9 14 Digital experience
3. progressive $33.2 13 Many discount options
4. Allstate $25.9 ten High risk drivers
5. USAA $15.8 6 Military auto insurance
6. Farmers $12.2 5 Many coverage options
7. Liberty Mutual $11.8 5 Many discount options
8. At national scale $5.8 2 Characteristics of specialized fonts
9. American family $5.2 2 Grouping options
ten. Travelers $4.9 2 oldest insurance company

state farm

Founded a century ago, State Farm is the most profitable auto insurance in the country. It has the largest market share and the most issued premiums.

State Farm has more than 19,000 agents and 60,000 employees nationwide. Additionally, you can access the company’s services through its website or apps. With such a reach, the company has gained popularity, especially among young people.

The company offers more options like:

  • Emergency roadside assistance.
  • Carpool driver coverage.
  • Reimbursement of rental coverage.

This company also offers attractive discounts. For example, you can save up to 25% if you’re a teenage driver with a GPA of 3.0 or higher.

State Farm’s customer satisfaction may be another contributing factor to its high profits. You can reach the company 24/7 through their website, app, agents, or customer service. And besides quality services, it has superior financial ratings.

Allstate

This company may have higher premiums, but it has carved out a niche for itself. Allstate is one of the few companies that insures high-risk drivers. It also has higher claims satisfaction rates than most companies.

Allstate also has many agents across the country. Today, they have around 46,000 employees. Plus, the company offers specialty coverages that most major insurance companies don’t.

These include:

But, Allstate’s customer satisfaction ratings are below average, according to JD Power. Still, you can get great discounts that offset the higher premium rates.

Progressive insurance

Like Allstate, Progressive offers competitive rates for drivers with accident histories. They also offer all basic auto insurance coverage.

Other coverage options include:

  • Reimbursement of car rental.

Progressive is best known for its Name Your Price feature. This feature gives you more control over your premium price. Here the company only asks for basic information and the amount you can pay. You will then get policy options that fit your budget.

Progressive Insurance also offers several discounts that help you save more. The Snapshot secure driver, for example, is a great discount feature.

The company also has strong financial ratings, which provides security for customers. But, according to JD Power’s ratings, customer satisfaction is below average.

Geico

This company is quite profitable since it insures more than 24 million vehicles. And with its nine regional offices, it has approximately 9,000 employees nationwide.

Geico offers one of the most affordable insurance coverages in the country.

Apart from affordable prices, Geico is popular due to its user-friendly mobile app. This mobile application has more than 3 million reviews on the Apple App Store (with a rating of 4.8 out of 5). The main features of the app allow consumers to access their digital insurance cards, request roadside assistance, and more.

In addition to the basic coverage options, Geico also offers other options, including:

  • Protection against personal injury.
  • Uninsured/underinsured motorist.

Additionally, Geico customer satisfaction is above average according to JD Power ratings. It is therefore not surprising that it is one of the largest car insurance companies.

USAA

USAA has a fascinating history. In 1922, 25 army officers got together and decided to insure each other’s cars. A century later, the company insures millions of soldiers and their families.

USAA is well known for offering its members competitive rates. So if you have an immediate family member in the military, this is a good option.

The company also offers several coverage options such as:

  • Car replacement assistance coverage.
  • Comprehensive and collision insurance.

Besides great features, USAA has the highest customer satisfaction rating. And according to NAIC, it also has very low complaint rates.

The only downside is the company’s strict military affiliation. Also, its website and app are less impressive than other major car insurance companies.

Liberty Mutual

Liberty Mutual has also been around for over a century. Today, it is among the most profitable companies with its market share of 5.6%. Additionally, this global company operates in 17 countries.

The company offers various insurance coverage options. Apart from its basic options, other options include

  • Liberty Mutual Deductible Fund (deductibles decrease over time).

Liberty Mutual also offers more discount options than most car insurance companies. First of all, as soon as you request your quote online, you benefit from a 12% reduction. Other discount options cover safe driving, paperless transcripts, and good grades for students.

This company ticks several boxes, but its customer satisfaction rating is below average.

Farmers insurance

Farmers is another company with an interesting history. It was founded in 1928 as an automobile insurance company for agricultural vehicles. Today it is the 7th most profitable company.

Apart from the basic coverage options, it also offers options such as:

  • Extensive equipment coverage.

Most insurance companies offer these additional options. However, Farmers stands out from other companies in two ways. First, it gives essential workers a premium reduction. And then it offers car insurance discounts for active duty military personnel, veterans, and honorably discharged members.

Travelers

Travelers Insurance is one of the oldest insurance companies. In fact, it has been in business as an automobile insurance company since 1897.

Today, the company has approximately 13,500 agents and more than 30,000 employees in several countries.

Travelers Insurance offers all basic insurance coverage and more. One of its best shrink options is IntelliDrive. Here you can lower your fares while driving safely. Join IntelliDrive and you can reduce your rates by around 20% if you drive safely all year round.

American family

Like Farmers, American Family began as an insurance company for farmers. Later it expanded and started to include non-farmers. Today, the company is the ninth most profitable auto insurance company. It also has fewer complaints than other large companies in its category.

This company offers all basic insurance coverage options. On top of that, they have other options, including:

  • Gap insurance.
  • Coverage in the event of accidental death or dismemberment.
  • Carpooling insurance.
  • Accident forgiveness coverage.

American Family also offers various discount options to help you save. For example, it offers bundled discount options to combine car insurance and home insurance.

The biggest downside is that the company is only available in 17 states.

At national scale

Nationwide is best known for its On Your Side magazine. This insurance evaluation plan encourages you to make changes every year. Here, the company can guide you to the policy options that best suit your needs.

Of course, you can revise your font at any time. But these reminders can help you evaluate your coverage options to save in the future.

The company also offers special options, including:

  • Exemption from total loss deductible.

Nationwide has below average consumer satisfaction ratings. However, it has a superior financial rating with AM

Final Thoughts

It is not easy to choose an auto insurance company based on its profitability. Yes, the financial stability of profitable car insurers attracts more customers. But, as we’ve seen, most large companies have below-average customer satisfaction ratings.

Additionally, every business has one or more features that propel it to the top. So, it can be about which features appeal to you the most. For example, a company may have an average mobile app but affordable rates.

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