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UPDATED: Mar 13, 2020
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When shopping for car insurance, it can be hard to tell different companies apart. From an outside perspective, all insurance companies seem to be basically the same. Once you begin working with them, however, you may realize that you have a definite preference for one insured over another. While an insurance company may offer a lower quote, it may not always be the best choice. Different companies offer slightly different benefits, and understanding those benefits can help potential customers decide which company to choose.
Allstate is the second-largest insurance company in the country, holding 10% of the market share. Geico is the third-largest, holding an 8% share. Originally developed to service government employees, Geico has grown massively in the past decade due to aggressive marketing and a focus on direct sales. Although the two companies traditionally service different niches, they have come to act more like rivals in recent years as the gap between them narrows.
Each company has its individual strengths and weaknesses. When shopping for insurance, it’s a good idea to weigh the pros and cons of each company and determine what will make the best fit for you.
Founded in 1931, Allstate employs around 35,000 people and services the United States and Canada. The company works through a hybrid model of agencies and direct sales, with more focus in recent years toward selling policies online. To further that end, Allstate recently acquired Esurance, allowing it to spread into direct-sales insurance without forfeiting its existing network of agencies.
Allstate is not the cheapest car insurance company in the nation, and it doesn’t advertise itself as such. Instead, it takes the stand that good protection is worth paying for, and it admonishes people to think twice about “cut-rate” insurance plans. These advertisements often seem directly aimed at Geico, which offers more competitive rates but sometimes cuts coverage in order to achieve that.
— You can use a local agent as a single, central contact for all of your insurance questions
— Accident forgiveness and deductible reduction programs are available
— 24-hour claims line, ability to file claims online and direct sales
— Discounts for multi-policy, multi-car, good student and other criteria
— Relatively low customer satisfaction scores
— Coverage is more expensive than with some other providers
— Claims sometimes take longer to handle
One of the newest features of Allstate policies is the Drivewise program, a type of pay-as-you-go auto insurance that monitors an individual’s driving habits and charges premiums accordingly. People who drive limited miles and engage in safe driving behaviors can save as much as 30% by enrolling in the program.
Founded as Government Employee Insurance Company in 1936, Geico currently employs 27,000 people. The company began selling policies to a wider population in 1974, but it didn’t become well-known until it began utilizing the Internet for sales in 1996. Traditionally, Geico sells policies directly to consumers and spends money on advertising instead of agency staff. In recent years, Geico has begun experimenting with an agency model, but it’s not nearly as thorough as Allstate’s agency network.
By embracing technology, making smart, funny advertisements, and focusing on cheap coverage, Geico markets to a younger demographic than Allstate. Geico also has the highest customer loyalty index of any insurance company; indeed, the brand has almost a cult following among some insureds.
— Usually one of the cheaper insurance companies
— Utilizes technology for sales and claims, allowing customers to be self-sufficient
— Safe drivers can save up to 26% on insurance
— Discounts for students, military personnel, and other groups
— Accident forgiveness for some qualifying members
— Often sacrifices coverage for the purpose of saving money, so policies can be bare-bones
— All questions and claims are handled through remote teams, so you will have no single contact person
— Identical policies may sometimes be more expensive than with other insurers
In many cases, Geico policies have the lowest rates because they have minimal coverages. A representative may convince the insured to carry lower limits, higher deductibles or simply drop some coverages in order to get the best rates. When identical policies are compared, Geico is not always the cheapest insurer, and insureds are often disappointed to realize they do not have sufficient coverage to handle a claim.
When purchasing insurance from any company, it’s important to understand what you’re buying. Researching coverages in advance will help you decide what you need on your policy so that you can get the best protection at the lowest possible price. Also be sure to ask for every discount you might qualify for. This will help give you a reasonable idea of how much your insurance should cost.
Ultimately, there is no single best insurance company. People who appreciate the hands-on, personalized assistance of an agent may prefer carrying a policy with Allstate. Individuals who want the lowest price and will take a risk with possible reduced coverages might be more satisfied with Geico. The best way to choose the company that’s best for you is to get multiple quotes, speak with each insurance company and decide what the best match for your needs will be.