August 20, 2009
Agency
How to Choose the Right Insurance Company
1) Work with an independent agent. The independent agent represents several insurance companies and does not have a vested interest in selling you a policy from one particular company.
The main advantage in having your own agent is that this person has a vested interest in keeping you happy. An independent agent can become familiar with your situation and guide you toward a suitable policy. An independent agent would become aware of less advantageous conditions with one company [and help you move to another]. You can change carriers without changing your agent.
2) Find out which insurers are recommended by body shops. One of the best ways to identify reliable insurers is to contact local body shops that you trust. Body shop managers have a unique perspective to offer, since they regularly interact with insurance adjusters. They know which companies have the smoothest claim processes, which affects how quickly the work can be completed on a damaged vehicle. And they know which companies are pushing aftermarket parts, in lieu of genuine original equipment manufacturer (OEM) parts, to cut costs.
3) Visit your state’s department of insurance web site. Although you may not be familiar with it, your state has a department of insurance. Most departments have web sites, and many publish “consumer complaint ratios” for all of the insurance companies that sell policies in their state. This ratio tells you how many complaints a car insurance company received. The experts recommend that consumers use complaint ratios to screen prospective insurers.
If you’ve done your homework, you should already have a list of car insurance companies with the lowest premium quotes. Now jot down the companies with the lowest (or best) complaint ratios. Then, compare your two lists — the companies that rank best on both lists likely deserve your strongest consideration.
4) Check the J.D. Power Ratings. J.D. Power and Associates collects data from individual policyholders nationwide and rates them according to coverage options, price, claims handling, satisfaction with company representatives and the overall experience. A quick visit to the J.D. Power Consumer Center will give you a feel for how the major carriers stack up. J.D. Power also publishes an annual survey of major auto insurers.
5) Consider an insurers’ financial strength ratings. As a final check, you can take a look at the A.M. Best and Standard & Poor’s ratings. Both companies publish financial strength ratings for all insurance companies — these “measure” an insurance company’s ability to pay out a claim (they have nothing to do with the way a company treats its customers).
For the general consumer, looking up these ratings is only a formality, since most of the well-known carriers are going to be a safe bet. But, if you’re considering a smaller, unfamiliar insurance carrier, you might consider this research time well spent. Insurance companies often provide this information on their web sites, but if not, you can run a search at the A.M. Best and Standard & Poor’s sites.
The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company’s solvency), F (in liquidation) and S (suspended). In any case, you should only work with companies that have at least a B+ rating.
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