Are auto insurance company rankings helpful?

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Things to Remember...
  • Auto insurance rankings are based on a number of different criteria
  • Companies that place well in the ratings of auto insurance companies receive high scores in each area or at least in 4 out of 5 areas
  • Financial scores indicate a company’s financial stability

A large number of auto insurance companies offering auto insurance protection leave consumers to sift through a mass of information in order to find the best coverage and rates.

Knowing each company’s rankings can help make this selection process a little less daunting.

Auto insurance company rankings provide a clear reference point for consumers looking for recommended auto insurance coverage and also for those on the lookout for the best rates.

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Ranking Criteria

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Like other types of insurance companies, the rankings auto insurance companies have are based on a certain set of criteria. The criteria used to rank a company may be based on:

  • Coverage rates
  • Coverage options
  • Financial strength of the company
  • Customer service
  • Overall customer satisfaction

Companies that place well in the ratings of auto insurance companies receive high scores in each area or at least in 4 out of 5 areas.

The companies that actually assign rankings, such as JD Power and Associates, may use letter grades to indicate where companies fall within a ranking. Letter grades can take the form of:

  • Superior = A++ to A+
  • Fair = B to B-
  • Weak = C to C-
  • S = Rating Suspended

Ultimately, an auto insurance company’s ranking provides a baseline measure for comparing one company with another.

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Rankings Vs Costs

When comparing company rankings, a high score indicates a company is financial sound, offers competitive prices, provides good customer service and offers multiple coverage options.

And while a company offering cheap rates may score high in certain areas, one of the most important areas to consider is the company’s financial score within a particular ranking.

Financial scores indicate a company’s financial stability, which has a bearing on its ability to pay out on customer claims. Oftentimes a company with a low financial score may be on the verge of bankruptcy.

When this happens, a company becomes insolvent and lacks the means to financially cover present or future accident claims.

To be on the safe side, consumers can check with their State Department of Insurance to research a particular company’s financial status as well as its overall ranking within the auto insurance market.

Companies not listed with a particular state department may appear on other state department listings. In this case, consumers can still check a particular company’s financial status by researching other state department listings.

The State Department of Insurance also keeps documentation on customer complaints made regarding different companies. A company with a large number of customer complaints may have scored low in one more criteria used within the ranking process.

State Departments typically publish company-related complaints using a ratio score, known as the consumer complaint ratio. Ratio scores are based on the number of complaints a company receives per 1,000 claims filed.

Company Comparisons

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When shopping for good auto insurance, part of the process should involve obtaining two or more quotes from different insurance companies.

For many people, rates and plans costs carry a lot of weight when comparing companies. The types of coverages offered also has a bearing on whether to consider a particular company over another.

After compiling a list of companies and quoted price coverages, consumers can check each company’s ranking to see which ones carry the highest scores.

By comparing a list of companies within a particular price range with the available rankings for each, consumers have a better chance in determining which auto insurer provides the best coverage.

Keep in mind that good coverage includes prompt and reliable customer service and a clear, efficient claims process. 

And while people who already have sufficient auto coverage may have little need to change insurers, rankings and coverage rates can change on a frequent basis.

Doing a company comparison every 6 months or so using the above-mentioned guidelines can help ensure consumers are getting the best rates and coverage options available at any given time.

Checking up on available company coverages on a regular basis also ensures consumers stay on top of auto insurance requirements within their states.

As state coverage requirements can change within any given year, consumers may want to consider changing insurers when an existing policy plan falls short of their state’s coverage requirements.

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