3 Ways You Should Investigate Your Insurance Company


Investigating Your Insurance Company Is As Easy As 1, 2, 3

When choosing an insurance company you want to make sure they are capable of handling your affairs. The last thing you want to do is partner with a company that goes out of business right after you’ve had an accident. But how do you go about investigating the best ones? The company is going to put its best foot forward and is unlikely to announce any problems. You have to research each company to decide who gets your business. Fortunately there are services you can use to check complaints, rates, and financial strength of insurers. Here are three ways to investigate your local insurance company.

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1. Look At The Company’s Official Rating

There are different companies whose job is to monitor and rate insurance companies. Standard & Poor’s has been monitoring the financial strength of insurance companies since 1971. Their ratings system provides an opinion on relative credit risk and the company’s ability to meet financial obligations based on long-term and short-term factors. An ‘AAA’ rating indicates the strongest creditworthiness while a rating of ‘C’ or ‘D’ is the lowest. A.M. Best is another credit rating organization that analyzes insurance companies and issues reports based on the company’s ability to meet financial and contract obligations. They have been around since 1899 and issue ratings similar to Standard and Poor’s. They allow you to search your potential insurer, and list information including the assigned letter grade for financial strength rating, credit rating, and debt rating.

2. Check Government Information

Has the insurance company been involved in any lawsuits? You can check for official records at both the federal and local level. For federal suits, go to the Public Access to Court Electronic Records (PACER). You can also browse through your state’s legal records. Every state also has an insurance department that oversees the industry. California's Department of Insurance, for instance, allows you to do research on enforcement actions and legal information, complaints, licenses, rate increases, and company profiles. If your insurance company has had any major legal issues, you’ll find it here. Even the state’s attorney general site is worth poking around on, as they may have issued statements about insurance rate increases or other problems with companies in your area.

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3. Check Costumer Reviews

When lawsuits and ratings aren’t enough, you can always turn to your neighbor. What have previous customers said about the insurance company you’re investigating? Search for customer satisfaction surveys and reviews on the web to see what others are saying. Google, Yelp, or any other review site will likely have the ramblings of disgruntled customers and praise from satisfied patrons on almost any company. JD Power and Associates has a section devoted to consumer studies of insurers. If you have a subscription to Consumer Reports, you might also be able to find ratings and reviews on the company you are interested in as well.
Date of original publication:
Updated on: November 10, 2015

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