15 September 2009

3 Reliable Ways to Learn about the History of an Auto Insurance Company

To find out if an auto insurance company has a good history, you can do a research at your state’s insurance department, check out customer ratings, and look into credit ratings.

Aside from considering the prices and insurance coverage, you also need to look at an auto insurance company’s history in order to make sure of its competence.  It is important that the company you choose is financially sound and is able to serve you when the time comes that you file your claims.  Here are reliable ways by which you can find out about a certain car insurance company’s history:

Do a research at your state’s insurance department

Your state’s Department of Insurance does not only ensure that insurance-related laws are being complied to by insurance companies; it also gives customers pertinent information needed to help purchase the right insurance policy from the right insurance company.  With regards to auto insurance, you are provided with a list of car insurance companies licensed to operate in your state along with their company profile, location, contact information, license status, and complaint history.  In the complaint history, you will find the total number of complaints being filed against an insurance company per year, as well as the categories they belong to, such as complaints found to require corrective action, complaints found to be without merit, complaints with other outcomes, and justified complaints.  If applicable, it also shows the number of violations and the types of violations committed by an insurance company in the past.  The complaint history also shows a comparison data, which illustrates a company’s complaint share in the total auto insurance industry.  All these information will help you analyze how an insurance company has been performing over the past few years in the industry.

Check out customer ratings

Another way to learn if a prospective insurance company has good history, is to check on customer ratings.  Some trusted firms, such as J.D. Power Ratings, do an annual study and research on how customers view and feel about their insurance providers.  They gather data from policyholders and rank insurance companies according to their prices, coverage, ease of contacting the insurer, and overall satisfaction.  J.D. Power and Associates also presents annual awards to the top-ranking auto insurer in their survey.

Look into credit ratings

Aside from looking at customer satisfaction, it is equally important to consider the financial strength of an insurance company to make sure you get your claims when you need them.  To guarantee yourself of this, you need to look at an insurer’s history of credit ratings.  A.M. Best Company and Standard and Poor’s (S&P) ratings are two of the most reliable rating firms in the industry.  They rate insurance companies according to its financial ability to pay their customers’ claims, setting aside customer service and other factors.  Their ratings range from A++ being the highest at A.M Best and AAA at S&P to D and CC being the lowest, respectively.  It is advisable that you choose an insurance company that has at least B++ or BBB rating to be safe.

Apart from all these helpful ways, you can also learn about an insurance company’s performance history by talking to other drivers, especially your close ones, who have had experience with having claims.  You can also inquire from car repair shops that are directly involved in dealing with insurance companies and ask which insurers are quick in responding to client claims.

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