While getting quotes for insurance coverage is a fairly quick and easy process, evaluating the effectiveness of coverage or performance of an insurance company can take time and experience with loss before you find out how your insurer really performs. You can learn to evaluate an insurance company's products and performance to help choose the best company for your needs, even before purchasing a policy.
Instructions
Evaluating Insurance
1. Check the insurance company's financial stability. Companies like A.M. Best (see Resources) provide independent ratings of the financial strength of insurance companies, and how able they are to fulfill policy and contract demands. How a company manages premiums, by investing and saving, determines how much cash they have available to cover losses, especially in the event of widespread catastrophes like earthquakes or hurricanes. Look for companies that hold at least an A+ rating and avoid any company that holds a rating lower than an A.
2. Research the insurer's record for paying claims. No database exists to track this type of information, so you will need to visit your state insurance department's website. Most states have a Consumer Affairs link that provides information--organized by the type of insurance--about complaints, premium amounts written per year, and other data about all of the insurance companies registered within that state.
3. Study customer-satisfaction levels through services such as JD Power & Associates (see Resources). This type of information is gathered from consumers and analyzed to determine how companies are viewed through the eyes of their customers. While you can't base your entire decision on such a study, it is helpful to know what other consumers feel about a company's products and services.
4. Review all the information you've collected about the insurer. Financial rating and complaint ratio hold the most importance when evaluating an insurance company. After that, considering customer-satisfaction ratings can help further your opinion.
Tags: insurance company, company products, insurance companies, type information
