#car insurance ratings
Car Insurance Ratings
Car Insurance companies are regulated by the government but various external rating agencies also provide very useful tools to help consumers in the car insurance comparison search. Car insurance companies are rated in many aspects from customer service to the financial strength of an organization.
When comparing car insurance quotes and trying to choose a car insurance company its important to get feedback outside of the companies advertisements or make a decision solely based on how cute the company spokesperson is (of course the Geico Gecko could possibly hold an exception to this rule
How a company is rated financially can really help provide some reassurance about their ability to pay a claim down the road which can help make the car insurance comparison search easier.
As a smart consumer you should always do some your own research before selecting the final provider of your new car insurance policy. Some tips include:
- Call the State Insurance Regulation Department to verify the company is licensed and able to provide such coverage in your state
- Check and research consumer complaints about the potential car insurance provider from state agencies, the better Business Bureau, online (respectable) forums and even ask friends for a referral.
- Try to check the company’s financial status and ratings across all the major rating agencies (see below)
Why do Car Insurance Quotes Differ?
There are many reasons why car insurance quotes differ from one company to another. Much of the answer to this question is simply based on a companies risk/profit model. Some car insurance companies have very conservative models of risk while others are a little more willing to take on higher risk clients and adjust premiums. Some have pools of assets they sell and must maintain a certain ROI for their investors.
What do Car Insurance Ratings show?
Car insurance ratings show a wide variety of things for investors but for consumers the most important items are (a) a forecast of an insurance companies ability to pay future claims and (b) their customer service.
Who are the Major Agencies who publish Car Insurance Ratings?
- A.M. Best
- J.D. Power and Associates
- Standard Poor s Ratings
- Fitch Ratings, Inc.
These are the 4 largest agencies who issue car insurance company ratings and more than likely you have heard the names before as these agencies often rate companies from almost every conceivable industry in the world.
A.M Best provides independent opinions of a company s financial strength and forecoast of the companys abaility to meet future obligations. The scale in which A.M. Best uses to publish their car insurance ratings fall into these categories with A++ being the highest.
- A++ and A+ (Superior)
- A and A- (Excellent)
- B++ and B+ (Good)
- B and B- (Fair)
You should always look for a car insurance company with a good rating so try to limit your focus on coverage from companies who are financially strong.
- C++ and C+ (marginal)
- C and C- (weak)
- D (poor)
- E (Under Regulatory Supervision)
- F (in Liquidation)
- S (Rating Suspended)
Its important to note that newer car insurance companies often start in the middle so if you are considering a fairly new car insurance company for coverage a good or fair rating should be expected as it does take time to build a higher rating with A.M. Best and other car insurance rating agencies
J.D. Power and Associates
Almost every major car insurance company has won a J.D. Power and Associates award for some level of customer service and when they do you will know as a J.D. Power award is an exceptional marketing tool for reassuring or attracting new customers.
J.D Power and Associates is one of the largest surveyors of companies in the word with a historical database of billions of data points to measure almost every aspect of business – from customer service to shopping to buying goods / services.
Standard Poor s Ratings
Standard Poor s is one of the largest credit rating agencies in the world. Currently they have over 8,000,000 ratings on over 40,000 companies worldwide
Fitch Ratings, Inc.
The Fitch Ratings Insurance Group is a provider of research and ratings on insurance companies worldwide providing ratings which fully incorporate unique elements of local markets to help distinguish their product from other rating agencies.
Choosing a car insurance company entails a lot of research other than simply comparing premium quotes. Do your research and select a company who not only has the coverage you need but also has a high chance of being there when you need to make a claim.
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