Auto insurance is required by law in every state. Protecting your property and your family, it’s a sound investment. It’s also a product that you hope you will never have to actually use. You want to choose a company that will actually pay the claim and take care of you should the need ever arise. Here are some tips to help you choose a provider that is financially sound, solid and likely to be around in a few more years.
There are several rating services available for auto insurance agencies. Not every company has been rated by these services, but the information offered by them can help you make an informed decision. Look for information on most providers with these groups:
• JDPower – Offering information on customer satisfaction, pricing and policy offerings, the one to five star ratings can help you decide if a company is worth further investigation.
• A.M. Best – Providing financial ratings on companies for more than a hundred years, A.M. Best rates insurers based on their long-term debt, short-term debt and outlook. Ratings of A or higher for long-term debt are desirable. The best ratings for short-term debt are a 1+ or 1.
The outlook indicates if there may be a change in ratings over the coming months. A stable company has a low likelihood of their financial status changing. A negative rating indicates that they may be downgraded and a positive rating indicates the group may be upgraded.
• Standard & Poor’s – It’s important to know that your insurer is able to meet all credit obligations. This is one of the top indicators that can help you determine if a company will actually be able to pay claims when the time comes. Standard & Poor’s also offers ratings based on a company’s financial strength. Look for ratings of A or better for a solid agency.
Better Business Bureau
Most insurance agencies are members of the local Better Business Bureau. Give the organization a call to see what kinds of complaints have been filed against the provider you are considering. In addition to learning about the various complaints, find out if the problems were resolved to the customer’s satisfaction. You can also check with your state Department of Insurance to see if there have been any problems with the company.
The Internet is an incredible source of customer information. Google the insurance company you are considering along with a request for individual reviews. Please remember that every agency, especially larger ones, will have some complaints against them. It is a normal part of doing business. However, the unhappy customers should be the exception rather than the norm. You can also seek reviews on insurance comparison sites as well as by talking to friends and family members.
One of the best ways to see determine a company’s financial stability is to look at their growth. This is an era of transparent accounting and most agencies now post their financial reports on the Internet. Visit the provider website and do a search for the annual report. Look for financial highlights showing revenue, earnings and sales comparisons from the previous year to the current one. This information can help you see if the group you are considering is growing or shrinking.
Some of the highest rated companies have been in business for well over a century. However, there are excellent companies that have only been around for the last twenty years or so and are financially sound. When looking at the history of a company, look for growth and expansion in addition to the date they were founded. The agency you choose should have a track record of growth and stability over the course of its existence.
Every insurance company must be licensed by any state they are operating in. Using the Internet to find the best price is an excellent idea, but make sure the agency you select is properly licensed in your state of residence. If you have any doubts about the licensure, or can’t find the information on the company website, contact your state Department of Insurance to verify the information.
Choosing a financially solid company is as important as finding one with great prices and excellent customer service. The process can be a little time consuming, but it will allow you to make an informed decision. You want to choose a company that will be there for you when they are needed. Taking the time to research different agencies will allow you to find the right one.