How You Can Rate Auto Insurance Companies

Auto insurance is an important part of your financial safety net, so it is important to go with the best car insurance provider to protect the value of you vehicle, your physical well-being, and the overall health of your financial standing. Rating auto insurance companies is one way that you can utilize to assure you do business with only the best auto insurance companies.

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Ratings are an important part of any car insurance search, as they can give you valuable information about many car insurance providers.

You can find out a company’s financial standing, how well the company treats its customers, and whether or not an insurance provider backs up all the promises made in their advertising.

Finding Ratings

It is not hard to find reviews of many car insurance companies, as well as different ratings systems, if you are using the Internet. There are many websites set up to allow consumers and customers to voice their opinions and rate a product or service.

However, such websites need to be taken with a grain of salt. Many consumers do not take the time to visit complaint-based websites in order to sing the praises of their auto insurance provider; they usually have an ax to grind, and such websites allow for serious venting. If you want to read about some insurance horror stories, then such sites are a good bet.

The problem with these types of sites is that there is no balance. There is no mediator to determine the validity of the claims of wrongdoing; you have no way of knowing if the stories are based only on the incorrect perceptions of the writer or if they are even true at all.

Your best bet is to find ratings that are generated by an outside source that is not affiliated with the insurance companies or consumers in any way. There are a host of such entities, and they all provide fair, unbiased assessments of the companies operating in the car insurance industry.

Using Ratings

Far too few consumers utilize ratings when searching for car insurance and it’s a shame because it is one of the few ways to judge what you are paying for. Many find out too late that they have been spending their hard-earned money with a company that cares little for good business practices and even less about customers’ needs.

When you are searching for car insurance, or even just window shopping so to speak, auto insurance ratings are one way to compare one company against another. Too often, consumers are looking for the cheapest or the first company they come across, and they end up with a company that acts cheap or a provider who charges them too much!

Utilizing ratings will help save you money and your sanity in the future, just by doing a bit of research now.

After an accident has happened is a horrible time to find out that your car insurance provider is in the midst of claiming bankruptcy or is none too interested in helping you with your claim.

Financial Ratings

The first bit of research when looking for a car insurance provider should be the financial ratings, according to the industry leaders of the National Association of Insurance Commissioners. Insurance companies melt into insolvency all the time, and you do not want your provider to be one of them.

The U.S. Securities & Exchange Commission designates certain ratings agencies as Nationally Recognized Statistical Rating Organizations, or NRSROs, to keep tabs on important financial industries that are relied upon by consumers. These ratings agencies essentially create scores that evaluate the financial stability of the companies.

There are currently 10 NRSROs, with commonly recognized agencies being Standard & Poor’s, Fitch Ratings, AM Best, and Moody’s. Each utilizes its own rating system, but most are based on an alphabetical scale with A, AAA and A+ being the highest ratings.

Many designate a cut-off point that indicates that an insurance company’s finances are tanking, such as anything under a B ranking.

Once you have a short list of insurance companies that you are considering, check out their financial ratings with a few of the NRSROs. Each maintains a website, and you will be able to ensure as much as possible that your hard-earned premiums will be paid to an insurance provider who will still be in business within the next six months to a year.

Customer-Generated Ratings

Another ratings system that is worth checking out is customer-based ratings. JD Power & Associates is a reliable outlet for ratings generated by customer responses on surveys. The company turns the survey data into Power Circles, with five out of five being the highest rating. JD Power grades factors such as rates, communication, and the claims process, to give an overall picture about all aspects of customer service as it relates to the car insurance industry.

The difference between generally consumer ratings and those provided by JD Power & Associates is time. JD Power & Associates has been conducting such ratings for quite some time, and they have no personal agenda to push through. They create unbiased, reliable ratings that have stood the test of time. They also sample from a large number of customers, so that a few poor ratings will average out to reveal the true nature of a car insurance provider.

After you look at financial ratings, compare the ratings of those auto insurance providers on your short list. Any company that has poor ratings should probably be crossed off. If you want to give them the benefit of the doubt, pull up their past few years’ worth of ratings, and see if they are any better. If they are not, then cross that one off the list for sure!

Independent Ratings

There are also independent ratings from companies that look at more than just responses to surveys. One such reliable company is Consumer Reports. Consumer Reports tests and rates different products and services in an undetectable manner to give readers a true look at the quality of certain products and services.

For instance, they might buy the latest year’s models of popular sedans so that it looks like a regular purchase by a private citizen, and then they put all the vehicles through a series of tests. They then publish their findings so readers will know how each one performs in a variety of areas.

They rate car insurance companies in similar ways. The only drawback is that the data is only released to subscribers of their magazine or website; you have to pay to see it. However, many people feel that Consumer Reports provides a wealth of valuable data that is well worth the subscription cost. As they rate everything from vehicles to appliances to beauty products, you may find that a subscription is of interest to you.

State Ratings

One last rating for car insurance companies is state-generated ratings. Every state is allowed to set its own rules and make its own laws concerning auto insurance, and each state has a department in the state government that is charged with regulating the insurance industry.

Each hosts a website for consumers and those in the insurance industry, and those websites are full of important information. Each website is different, but most states host a section regarding customer complaints, and many create ratings based on the number and nature of complaints that the state receives about auto insurance companies.

On such ratings system is found on the New York Department of Financial Services website. It uses percentages of complaints to rank each provider, so drivers in New York can view by year which insurers garnered the most customer complaints, how many were dropped, and how many were upheld by the state as valid.

Once you have looked at ratings for finances and those based on customer complaints and unbiased reports, then you need to contact your state’s department of insurance to check out the ratings for your state. Not all states create a ranking system, but they usually contain complaint and resolution data to help keep consumers informed; you can likely also see any actions by the state or Federal Government against the insurer for violating insurance rules and regulations.

After you have all your ratings, you should choose an insurance provider that ranks high to fair in as many ranking categories as possible. They are all important; an insurer with great customer support ratings won’t be so great if they tank in the next couple of months, and a car insurance company with the strongest fiscal strength will give you a strong sense of aversion when their agents are rude and unhelpful.

Once you have chosen a car insurance company with which to sign, you can rest easy knowing that you did everything that was humanly possible to identify the best car insurance company.

Make sure to stay updated with new ratings, because you will want to know right away if any of those ratings drop!

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