- Nonprofit car insurance companies can sometimes offer lower rates.
- Private insurers spend a fortune on advertising. The lower overhead and marketing spend of nonprofit insurance companies gets passed as savings to policy holders resulting in lower premiums.
What We'll Cover
- What Are Nonprofit Car Insurance Companies?
- What Are Mutual Insurance Companies?
- List of Nonprofit and Mutual Car Insurance Companies
- The Nonprofits Insurance Alliance
- Liberty Mutual Group
- American Family Insurance
- COUNTRY Financial
- Shelter Insurance
- Grange Insurance Association
- Acuity Insurance
- Auto-Owners Insurance
- Central Mutual Insurance Companies
- Amica Mutual Insurance
- PEMCO Mutual Insurance Company
- The Norfolk & Dedham Group
- Why Do Some Insurance Businesses Choose to Be Nonprofit?
- Are Nonprofit Car Insurance Companies Cheaper?
- Why Are the Policies of Nonprofit Car Insurance Companies Less Expensive Than For-Profit Car Insurance Companies?
- Final Thoughts
It feels like we spend too darn much on our car insurance bill. But the insurance business is a tricky one. Many insurance companies don't even turn an underwriting profit, and only manage to turn a profit by investing the float.
In the insurance business, the best companies are the ones that can price and manage risk more efficiently. Unexpected situations can often be costly, and most people are not able to financially afford paying for the outcomes. Here’s where insurance comes in. The purpose of any insurance policy is to mitigate risk—that is to lessen the effects of a possible expected or unexpected situation. Therefore, insurance is a matter of public interest because of its far reaching effects on people and the economy. The issue arises when although everyone is exposed to and affected by risk, not everyone can afford insurance.
That's where the concept of nonprofit car insurance companies comes in. Not only can nonprofit car insurance companies provide many of the perks and advantages that you're looking for, but they can also do so at rates that are generally lower than those of their competitors. What's more, most nonprofit car insurance companies are smaller than their for-profit counterparts, and they often pride themselves on providing individualized service that can minimize the frustration that comes with dealing with filing a claim. In this article, we discuss nonprofit car insurance companies, as well as mutual insurance car companies, which follow a similar model.
What Are Nonprofit Car Insurance Companies?
Nonprofit car insurance companies are simply car insurance companies that do not operate for profit or take any profits from their customers. This type of insurance is not to be confused with insurance offered to nonprofit organizations. Not-for-profit insurance companies can offer lower rates by focusing on driving skill, rather than discriminatory factors such as credit score. This makes them a great choice for drivers who want to hit the road without breaking the bank.
What Are Mutual Insurance Companies?
People interested in nonprofit car insurance companies are often unfamiliar with the term mutual insurance companies, which is the proper term used in the industry to refer to insurance companies that are owned entirely by their policyholders. That means that a mutual insurance company’s goal isn’t to please shareholders, but instead to please its policyholders. If you buy a policy in one of these companies, you are entitled to a share of the insurance company's future profits in the form of dividend distributions, rebates, or reduced future premiums.
Although mutual insurance companies have grown in popularity over the years, one of the biggest disadvantages to them is that they can struggle to raise capital, which makes some a little more financially vulnerable in the event of major natural disaster than their private counterparts, which can tap into the capital markets more easily to raise funding. A simple (though not perfectly accurate) analogy I use to explain mutual insurance companies to people is that they function as a Home Owners Associations. Everyone pitches in to build a fund, and then they all try to benefit equally from everyone's contribution.
While this is not a fully nonprofit model, the mutual structure is more friendly toward policyholders, oftentimes returning excess cash paid in premiums back to the pockets of policyholders via lower future premiums, dividends, or rebates. You saw this take place during the COVID pandemic. For this reason, these mutual entities represent a very attractive proposition to their potential customers. Though these mutual insurance companies may be for-profit organizations, their commitment to lowering their rates and paying out dividends to their customers makes them a good choice for someone who likes the idea of a nonprofit car insurance company, but cannot find one in their area.
The Benefits of Mutual Insurance Companies
- Mutual insurance companies only aim to please policyholders, not shareholders who can influence the decisions of the company at other insurance companies.
- Most mutual insurance companies have been around for at least 100 years and have the reputation and experience to provide good service.
- Members of a mutual insurance company may enjoy enhanced rights that include the ability to vote for directors, approve company transactions, receive dividends, and the ability to share surpluses (if there are any and subject to state law).
List of Nonprofit and Mutual Car Insurance Companies
We've put together the most comprehensive list of nonprofit and mutual insurance companies in the United States. These are great places to start in your search for the perfect not-for-profit car insurance company and score some great savings.
CURE is the only true nonprofit car insurance company on this list because it is registered as such. Citizens United Reciprocal Exchange, or CURE, is a nonprofit car insurance company providing the citizens of Pennsylvania and New Jersey with nonprofit car insurance. The goal of CURE is to remove discriminatory policies from the process of receiving car insurance, and they only look at their customers' driving history—not factors such as their occupation, education, or income. As providers of car insurance in PA and NJ, CURE has been pre-approved by several repair shops and offers discounts of up to 35-50% for safe driving. Additionally, its policies include 24/7 roadside assistance. If you're a resident of Pennsylvania or New Jersey and are on the lookout for comprehensive nonprofit car insurance, CURE may just be a great choice for you and your car.
The Nonprofits Insurance Alliance
The Nonprofits Insurance Alliance is another nonprofit car insurance company; however, it only extends to covering nonprofit organizations. The Nonprofits Insurance Alliance is a 501(c)3 registered nonprofit that offers many different kinds of insurance, including auto insurance, to nonprofit organizations and their members. Although it's been around for over 30 years and has been proven to be an asset to members of the nonprofit community looking for insurance and support, its appeal is likely relatively specific and not ideal for everyday drivers who don't work for nonprofits. Nevertheless, as a nonprofit organization technically offering car insurance, it may be worth checking out for members of the nonprofit community.
Nationwide is a mutual insurance company that has three areas of expertise: insurance, investing, and retirement. Number 73 on the Fortune 500 list of 2019, Nationwide was founded in 1926—originally as the Farm Bureau Mutual Automobile Insurance Company. At Nationwide, customers all over the United States can receive auto insurance, home insurance, life insurance, and more.
The app makes it easy for customers to pay bills, make claims, and view their policy. Additionally, Nationwide has an entire department dedicated to customer relations, which means that customers are always being taken care of when they need it mostThe Nonprofits Insurance Alliance
Liberty Mutual Group
Founded in 1912 as the Massachusetts Employees Insurance Association, Liberty Mutual Group earned a spot on the Fortune 1oo list after earning $43 billion in revenue in 2019. It's 2008 acquisition of Safeco Corporation for $6.2 billion increased Liberty Mutual's revenue to $30 billion in the span of 12 years. With its headquarters in Boston, this mutual insurance company is currently in sixth place on the list of the biggest casualty insurers in the world.
In addition to auto insurance, Liberty Mutual also offers insurance products for properties and businesses. The company services all 50 states and offers plenty of ways to save its policyholders money, such as military discounts, discounts for having a student that gets good grades, and discounts for being a homeowner. With Liberty Mutual, you can also save money on your auto insurance for insuring a hybrid or electric vehicle, as well as installing devices that reduce the risk of theft.
American Family Insurance
Otherwise referred to as AmFam, American Family Insurance follows the mutual insurance company model and provides auto insurance, as well as property, casualty, life, and health insurance. Its revenue in 2019 surpassed $12 billion, making it one of the most successful insurance providers in the country. Some of the benefits of American Family Insurance's auto insurance includes forgiveness for accidents, roadside assistance, and reimbursements on rental cars.
You can also save money when you switch from your previous insurance provider to American Family Insurance. Additionally, policyholders have the option to receive discounts for bundling auto and home insurance policies and for being a loyal customer. The longer you are a customer of American Family Insurance, the more money you can save on your insurance policies.
American Family Insurance operates in 17 states:
- South Dakota
- North Dakota
COUNTRY Financial and its subsidiaries provide services to customers across 19 states. This mutual insurance company provides both insurance products and financial services, and in 2019 its revenue reached $3.629 billion. Like State Farm, COUNTRY Financial's headquarters are in Bloomington, Illinois. For car insurance, customers can rely on COUNTRY Financial to provide the standard coverage that most drivers need, including underinsured/uninsured motorist coverage, comprehensive coverage, and collision coverage.
One of the most unique discounts that COUNTRY Financial offers is a discount for engaged couples, as well as teachers, police offices, firefighters, paramedics, and more. Because many of its customers live in rural areas, in addition to offering auto and home insurance, COUNTRY Financial also offers insurance for farms, crops, and special products.
COUNTRY Financial services 19 states:
- North Dakota
Shelter Insurance offers auto insurance, home insurance, business insurance, and life insurance. As a mutual insurance provider, Shelter Insurance has been providing good customer service and quality insurance products since 1946. Shelter Insurance's vision emphasizes the importance of value, which is why they care so much about their policyholders—who are the true owners of Shelter Insurance.
For car insurance, Shelter Insurance provides basic coverage that most drivers want in the event of an accident, including comprehensive and collision coverage, medical payments, liability coverage for bodily injuries and property damage. In addition, customers can choose to add roadside assistance, rental reimbursement, and more. Shelter Insurance offers more than 10 ways that you can receive a discount on your car insurance. Visit the website to see which ones you might be eligible for.
Shelter Insurance services these 15 states:
Grange Insurance Association
The mutual insurance company Grange Insurance Association is a veteran insurance provider, having serviced customers since 1894. With offices in Washington, Oregon, California, Colorado, Idaho, and Wyoming, Grange Insurance Association offers home, auto, and farm and ranch insurance. For car insurance, customers can pick from a variety of coverage options that will meet state requirements and provide extra financial security in case of emergencies.
For instance, on their car insurance policies with Grange Insurance Association, customers can receive financial help for towing costs, collision coverage, and comprehensive coverage. You also have the option to financially protect the sound equipment in your vehicle, too. Grange Insurance Association is a good choice for competitive rates and affordable coverage.
Since 1925, Acuity Insurance has prided itself on making customers happy with their personal insurance policies, including auto and home insurance. According to Acuity Insurance, the mutual insurance company has more than $4 billion in assets, which provides customers with certainty that the company is financially healthy.
As part of its mission to protect its customers, Acuity Insurance provides auto insurance coverage that will protect you during emergencies. Customers can choose from various coverage options and receive discounts for being a graduate student, taking a driving course on accident prevention, and more.
Acuity Insurance operates in the following 22 states:
- New Mexico
- North Dakota
- South Dakota
With its headquarters in Lansing, Michigan, Auto-Owners Insurance services approximately 3 million customers in five states: Arizona, California, Nevada, Oregon, and Washington.. The auto insurance policies that customers can choose from offer coverage for roadside assistance, replacement of new cars, and coverage for rental cars. In addition to basic auto insurance coverage like liability and property damage, as well as medical payments, customers of this mutual insurance company can choose to add optional coverage to their policies, such as loan gap coverage and diminished value coverage.
In fact, Auto-Owners Insurance offers a package where customers can receive more than 10 coverage add-ons that will ensure that they are financially secured no matter what situation they run into. There are also additional ways that customers can save money with this insurance provider, including good payment history, paperless billing, multi-policy bundling, and vehicular safety features.
Central Mutual Insurance Companies
Founded in 1876, Central Mutual Insurance Companies is a mutual insurance company that offers insurance policies for auto, property, and business in 24 states. The personal auto coverage policies that this insurance provider offers meets the needs of most drivers. With global coverage for rental cars, short-term replacement coverage, expenses on transportation, and lease gap coverage, customers can rely on the affordability and quality that Central Mutual Insurance Companies offers.
Like other insurance providers, Central Mutual Insurance Companies provides ample ways for customers to save money on their auto insurance policies. By installing safety features in your insured vehicles, taking driving training courses, paying your annual premium in full, and having good payment history, you can easily reduce the cost of your insurance policy and focus on your safety and financial security.
Central Mutual Insurance Companies services policyholders in the following 24 states:
- New Hampshire
- New York
- North Carolina
- South Carolina
- New Mexico
Amica Mutual Insurance
Based in Lincoln, Rhode Island, Amica Mutual Insurance was founded in 1907. The company reported that in 2019, Amica Mutual Insurance had $5.4 billion in assets, and 1.6 million active policies. Because this is a mutual insurance company, along with its three subsidiaries, Amica Mutual Insurance focuses on putting the customers and policyholders first. Policyholders can choose from a variety of plans, including auto insurance, property insurance, flood insurance, life insurance, and more.
Amica Mutual Insurance's car insurance coverage meets the basics, but also offers you the choice to purchase additional coverage just incase you want to be financially prepared for the worst. The two main goals of this car insurance is to protect yourself and to protect your car. By offering Personal Injury Protection, liability for bodily injuries, and coverage against underinsured and uninsured drivers, customers can protect themselves and their families.
PEMCO Mutual Insurance Company
Based in Seattle, PEMCO Mutual Insurance Company is one of the largest insurance companies in the Northwest region. Servicing the states of Washington and Oregon, their vision of providing service that is different guides everything that PEMCO Mutual Insurance Company does. This insurance provider pledges to protect you, your items, and your Northwest. Policyholders can pick between auto insurance, property insurance, and more.
PEMCO Mutual Insurance Company offers many discounts that may help you save money on your car insurance. Not only can you receive a discount on car insurance if you are an educator, but you can also receive a discount if you are an alumnus of the University of Washington. In addition, you may be eligible to save money if you have a newer vehicle model and have low mileage on your insured vehicle.
The Norfolk & Dedham Group
The Norfolk & Dedham Group is a mutual insurance company that focuses on community, stating that their insurance is locally grown. Also a part of the Norfolk & Dedham Group is Dorchester Mutual Insurance Co. and Fitchburg Mutual Insurance Co. With offices in both Massachusetts and New Jersey, the Norfolk & Dedham Group offers insurance products in the personal and commercial area.
Under its personal insurance category, customers can create policies for auto insurance, property insurance, and umbrella insurance. This insurance providers offers policyholders plenty of opportunities to get save money, including accident forgiveness, good grades discount, and a discount for driving a hybrid vehicle.
Why Do Some Insurance Businesses Choose to Be Nonprofit?
The main motive of nonprofit insurance providers is to make insurance available and accessible to everyone, as a matter of public good. Many of the factors that insurers use to generate a quote, such as income, education, and credit score, can be considered discriminatory income rating factors. By refusing to adopt these metrics and instead providing service to any customer who wants insurance (while basing their rates on their driving history), nonprofit car insurance companies can insure more drivers.
Another major reason for insurance businesses choosing to be nonprofit is the fact that smaller-scale insurance operations can provide more selective, personalized customer service to keep their clients happy. This is a major selling point to customers who are interested in purchasing car insurance but don't want to end up one customer of millions in a large, faceless corporation. By keeping their operations small and providing strong customer service, nonprofit car insurance companies are able to attract new customers and keep them happy.
Are Nonprofit Car Insurance Companies Cheaper?
Typically, yes, nonprofit car insurance companies are cheaper than for-profit car insurance companies. A commonly cited figure is that nonprofit car insurance companies can have rates as low as $45 per month for minimum liability, or approximately $540 per year. Compared to the average rate of a for-profit car insurance company, whose annual rates can vary from $3,000 to $6,000 (depending on the company used and the amount of coverage requested), this can equate to an enormous amount of savings.
Why Are the Policies of Nonprofit Car Insurance Companies Less Expensive Than For-Profit Car Insurance Companies?
Because nonprofit car insurance companies are smaller than for-profit car insurance companies, they typically have lower overhead costs, a smaller staff, and thus fewer expenditures. This is not always advantageous, as larger company could enjoy economies of scale that the smaller competitors don't have. Additionally, because of their not-for-profit status, some nonprofit car insurance companies may not need to pay as much in taxes or associated costs.
Furthermore, because nonprofit insurance companies likely don't have a board whose entire goal is to make as much profit as possible, they can focus on providing better customer service and less expensive rates instead of solely focusing on the bottom line. For these reasons, nonprofit car insurance companies are able to provide less expensive car insurance to their customers, making them a great resource for anyone looking for reasonably priced car insurance.
Finding the perfect car insurance company and policy can be difficult. One option for drivers looking for a good car insurance policy is to check out nonprofit car insurance companies. In the list we've provided above, CURE is the only true nonprofit car insurance company. However, you may also be interested in a mutual car insurance company. Although these companies are not true nonprofits, they follow a similar model that allows policyholders to receive the company's profits through dividend distributions, rebates, reduced future premiums, and more.
Some of the most popular insurance providers in the United States, like Nationwide, State Farm, and Liberty Mutual, are mutual insurance companies that follow this model. The benefits of nonprofit and mutual car insurance companies include cheaper rates, great customer service, and non-discriminatory policies. If you're looking for a smaller car insurance company that may provide you with all the perks of a larger one and a hassle-free experience, nonprofit car insurance companies and mutual car insurance companies may be the perfect option for you.
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