When you think about the largest auto insurance companies, what names come to mind right away? For many, the list includes State Farm, Geico, Allstate, Nationwide and more. While there is a multitude of insurance companies in every state, these market giants keep coming out on top of their game year after year. Many of them have been in business for over a hundred years, which is a lot more than can be said about other businesses. So, what is the staying power of some of these insurance giants and how did they get to be so big?
From Caveman to Gecko
Many people are all too familiar with Geico. The commercials that are now famous for the talking gecko are the stuff of legend. However, most people have no idea about how Geico came to exist and its fascinating history that led them to the phenomenal success the company enjoys today. In the 1930’s, the country was just coming to terms with the Great Depression and all it had done to the economy. Not too many people were looking to start a company. However, Leo and Lillian Goodwin were ready to start a new venture. Leo was sure that he had a successful business plan and by the mid-1930s, he established the Government Employees Insurance Company, affectionately referred to today as Geico. Many people do not realize that the company was initially created to provide insurance for federal employees and a limited number of military members. Skip to today, with the company’s worth in the billions, thousands of associates all over the country and a strong market lead; one must wonder if the Goodwin’s could ever have imagined the incredible success their vision would become.
State Farm Is “Still There”
Most people today recognize the jingle of “like a good neighbor, State Farm is there,” but most people don’t know how State Farm, another auto insurance giant, started out. Back in the early 1920s, a retired farmer by the name of George Mecherle founded one of the largest auto insurance companies known today. It originally was designed to be a policy available for farmers. While the company continued into the insurance field by including life and homeowners to their offerings, it remains today a powerhouse in the auto insurance field, writing millions of policies. Some attribute the company’s status as one of the largest auto insurance companies to its commitment to strong advertising and sponsorship practices. Even today, their sponsorship of state highways with a free roadside assistance program that assists stranded motorists in need keeps their brand in line with consumer affection and loyalty.
Nationwide is Still On your Side
In the mid-1920s, another one of today’s largest auto insurance companies got their start in Ohio. The Ohio Farm Bureau Federation created and incorporated a business they called the Farm Bureau Mutual Automobile Insurance Company. The law then specifically stated that in order to complete this task, they would need one hundred people to say they would be policyholders. The very first agents recruited ten times that much and the company started off with an astounding one thousand policyholders!
The very first type of policy offered was of course automobile insurance, hence the name. In the beginning, the insurance was only available to farmers residing in Ohio. By the late 1920’s the company was writing policies for farmers in other states such a Virginia, Maryland, Vermont and North Carolina. By the middle of the 1950’s, the company changed their name to Nationwide Insurance to truly reflect the reach of their customers. Another common theme seen here with Nationwide is their vast foray into advertising and keeping their name constant in the minds of their customers and potential policyholders. They sponsor many ventures including NASCAR, the renaming of Columbus Children’s Hospital to Nationwide Children’s Hospital due to a fifty million dollar donation and they are the official insurance sponsor of the Cincinnati Bengals. Today, they write a vast array of policies and coverages across many genres, including property, financial investments and much more.
You are Still in Very Good Hands
During a bridge game on a commuter train in 1930, a man by the name of Carl Odell discussed a business idea with his neighbor Robert Wood (who was then Chairman of Sears) about a great way to sell auto insurance through the mail. The name Allstate had already been chosen as the result of a contest by Sears to name a new set of tires. However, Wood so liked Odell’s idea that the Allstate Insurance Company would be born. One of today’s largest auto insurance companies got its start by selling auto insurance through the Sears catalog! Odell would wind up being the Vice President and Secretary of the company for his award winning idea. In the 1950s, Allstate would add fire, homeowner’s and life insurance to its offerings, but it would remain a titan in the car insurance business up to and including today. Today’s advertising campaign that touts, “Life comes at you fast” portrays a master mayhem who drops trouble into the life of many individuals, but Allstate comes to the rescue to save them quickly.
More Than Just a Name
Today’s laws across the country require that every driver carry at least a liability policy to ensure they are protected as well as the welfare of those they may encounter in an accident. While there are a select few companies that make the list as the largest auto insurance companies out there, there are many smaller companies that still have made quite a name for themselves and still nip at the heels of the insurance giants. You’ve heard of the wildly popular Progressive, which has inched its way towards the top over the years and also AAA, Liberty Mutual and other names that are very popular.
Trying to figure out which company to choose from can be a bit on the tricky side. There are so many factors that contribute to an insurer’s quality. Just because they may be one of the largest auto insurance companies operating doesn’t mean they offer the best for you. While you may overlook the financial strength of an insurer, you shouldn’t dismiss it. A company in financial trouble may not be the one you should choose. Check the ratings of the company when it comes to customer service and claims satisfaction as well. Even going as far as to make sure the company has a valid license in your state is a good practice.
In most cases, checking with most of these companies will provide you with sound coverage with competitive prices and they can be counted on to be financially sound. You’ll find subtle differences, but with the backgrounds and history that you’ve learned about here, you can see why these insurers are today’s largest auto insurance companies.