How can I check the company’s rating?
A. M. Best Company is the leading provider of financial information and ratings for property and casualty insurance companies. Check out their book (or CD-ROM) at many libraries, or you can visit their Web site (http://www.ambest.com). Moody’s Investor Service and Standard & Poor’s also rate some property and casualty companies. Each service uses a different rating scheme, so to make an informed decision, you should read the ratings definitions for that service. Stick with companies that meet the service’s criteria for being in the top categories--such as “excellent” or “very good.” Also, be sure that any ratings you use have not been changed since the publication date of the source. You should look for update sheets or call the rating company.
When most people think about rating a company's financial strength they think of the stock market and while there are publicly held car insurance companies, but not every car insurance company listed there. Many drivers are scrambling to find the lowest insurance quote often ignore the company's history of claim payments and this could cost them a fortune in the long run.
When an car insurance company is in a weak financial position, it increases the risk of loss to their customers who hold policies and/or are in the process of filing claims. There have been cases of drivers who faithfully paid their premiums for years and then after filing a claim were unable to collect and then faced the headache of paying for damages themselves plus finding another car insurance company to replace their coverage often at higher rates.
To avoid this nightmare scenario it's best to verify the status of the car insurance company in the financial markets. There are several organizations that monitor car insurance company's financial strength. The rating system is usually from "A" to "F"; the best companies will have ratings of "A' or "B' while the worst companies receive "E' or "F' ratings.
Your relationship with an car insurance company is legal and financial. This is why it is in your best interest to periodically check the financial strength of your insurer. There are several consumer advocate organizations that publish information on property and casualty companies to inform the public about issues regarding their financial safety. These issues affect not only car owners but home and business owners as well.
These independent agencies along with the department of insurance that exist in every state realize that car insurance company policy holders stand to lose everything if the company becomes insolvent. But there are also consumer ratings of car insurance company performance from the view of a policyholder that are important to consider. These reviews can give you insight into the type of experience you might have as the customer of a particular car insurance company.
Checking car insurance company ratings has become easier with the advent of the Internet. You can now get information about most insurance companies very quickly so that you can make the best decision about which company to use for your insurance needs.
J.D. Power has information, studies and ratings on all kinds of insurance companies, and they have a great, easy to use website ranking auto insurers as well.
They do a comprehensive study on insurance companies comparing customer’s overall experience, the policy offerings of each company, the pricing, the billing and payment procedures and the ease of contacting the insurer.
A complete website for all things automotive, Edmunds also offers tips on finding the best insurer for your vehicle. On their page, “How to Choose the Right Insurance Company” they offer links to many other sites that help you find ratings.
State Department of Insurance Websites
You can also get information about individual companies at the department of insurance websites. Each state has such a site, and each lists complaints from that state. While insurance company policies do vary by state, watch for general trends. If a company has high complaints in many states, you may want to avoid that company.
The magazine does a survey regularly to compare companies and give recommendations on specific companies. The online resources from the magazine are a mixture of free and paid. If you don’t find all the information you want in the free pages, try finding the hard copy at the library so you can get a complete view of their detailed study.