Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 25, 2020

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Here's what you need to know...

  • Knowing which auto insurance coverage to choose can be tricky
  • Financial rating companies determine the longevity of auto insurance companies
  • You should compare at least three auto insurance companies before making a final decision

There are many auto insurance companies that have coverage for automobile and it may be a difficult thing for a client to know the right company that he can use.

Auto insurance companies have different services that they offer their clients.

It is always good to ensure that before engaging with an insurance firm or broker you have done a comparison of the services being offered by these firms.

Enter your zip code into our FREE auto insurance comparison tool above to see rates offered to you from well-ranked companies.

What a Good Ranking Tells You

For instance, there are some companies that offer a wide variety of coverage to its client at reasonable prices while others have a few services at a reasonable price.

This is why you need to have in mind the right coverage for choosing the right auto insurance company.

There are some factors that you should consider when looking for an insurance firm that can offer you coverage for your automobile.

A good way of establishing reliability and how is the company doing in the insurance industry is by going through auto insurance ranking where companies that offer these kinds of services are measured using this ranking.

When a company appears top of the ranking it means that the company is both financially stable and able to meet its obligation when it is needed to.

Ensure that, when choosing an auto insurance provider, you research the ranking in order to know the companies that you can comfortably be engaged with in order to get the coverage that you would need.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Factors Affecting the Ranking of Auto Insurance Companies

An insurance company must have enough cash for it to be able to meet its financial obligations.

When an insurance company has no cash to pay for the claims that are forwarded by the clients, it always creates a confusion that drives a lot of clients out of the company making it hard for it to be able to continue with its operation.

As a result, the company can collapse with many debts from its client and this is why ranking considers liquidity as an important element that must be used in ranking an insurance company.

Although an insurance company might have assets, it is always important for the insurance company to have operational cash to help it run its daily activities effectively.

The asset base is also used when ranking an insurance company. It is a fact that a company with a strong asset base is more likely to be able to meet the financial responsibility and is going to last for a long time.

Although there are many companies that do not have a large asset base, they are not likely to appear top of the insurance industry. A company that has a strong financial base is used in safeguarding the client investment and this can be demonstrated by the asset that the company has.

Another important element used in ranking an insurance company is the reserve it has. There is a set limit of the reserve that every insurance company should have and it acts as the security of the company in case of its insolvency.

The services that the company has are also used in ranking auto insurance companies.

For instance, a company with a variety of services that are aimed to benefit the clients rather than the company itself will always make the company to be more attractive and make it achieve a better ranking.

This, in turn, will make more clients to prefer the company raising the client base and therefore the company being popular.

Those are some of the few factors that are looked at when the insurance ranking is done and this can be a good way of establishing the strength of the company you engage with.

Knowing that you have an insurer who has a good ranking can make you rest easy knowing that you have invested your money in the right firm. Knowing which auto insurance company is ranked 1 can help you compare your rates.

Those companies that have poor rankings may be risky and may not be therefore for you when you need their services. When you are looking for a company that you need to engage with, it’s good to consider a company that has a good ranking.

Benefits of Choosing a Highly Ranked Auto Insurance Company

  • First, you will be able to feel more comfortable with dealing with an insurance company that is ranked high as you will know it has the desired qualities to be able to rank high.
  • You will be assured that the company that you may count on such accompany if you have any issue regarding your automobile. This includes compensation and the advice that you may need from such a company.
  • When you insure your automobile insurance company that is ranked high, you will be able to get highly professional services that the firm has, you can be able to get all the details you may need when for any asset in this category.

There are many more benefits that will arise when you choose one of the highly-rated auto insurance companies especially if you don’t have any experience in the industry.

This is a good way of finding the right firm for you and this can be the perfect way to start your research with when looking for an auto insurance company.

The ranking is always done to ensure that people are able to have an overview of how auto insurance companies are doing.

The main feature of ranking is that it is not done by the companies themselves, but by independent bodies that carry out research for the customers.

To get FREE rate quotes from well-ranked auto insurance companies, enter your zip code into our comparison tool below!

References:

  1. http://www.consumerreports.org/cro/magazine-archive/2010/october/money/car-insurance/overview/index.htm
  2. http://www.propertycasualty360.com/2015/11/19/20-auto-insurance-companies-ranked-from-worst-to-b
  3. http://www.huffingtonpost.com/robert-siciliano/5-insidious-forms-of-auto_b_1284291.html
  4. https://www.nationwide.com/car-insurance-policy.jsp
  5. https://www.statefarm.com/