How to Check if an Auto Insurance Company Is Legitimate in 2024 (Our Guided Approach)
To check if an auto insurance company is legitimate, view their website for red flags, verify licensing, and check out rating sites such as A.M. Best. Reputable companies usually have an A rating or higher from A.M. Best. You should also view customer reviews and check the policy fine print.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
UPDATED: Sep 25, 2024
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 25, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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When shopping for a policy, check if an auto insurance company is legitimate by viewing their website, verifying licensing, checking reviews and ratings, and reviewing the policy.
The best auto insurance companies have various auto insurance policies that protect a person in an accident with repairs, medical bills, car rentals, and even car replacements. This is why investing in a quality insurance plan with a reputable insurance company is important.
Today, the smallest and biggest auto insurance companies offer policies to car owners. It is important to do research to determine whether the auto insurance company is legitimate.
Read on to learn how to check if an insurance company is legitimate. You can also enter your ZIP code into our free car insurance tool to find quotes from legitimate auto insurance companies.
- Step #1: Look at the Website – Check the website for red flags
- Step #2: Verify Licensing – Check the licensing of the company
- Step #3: Check Ratings– See if it’s rated on reputable sites
- Step #4: Check Reviews – See what others think of the company
- Step #5: Check Policy – Read the fine print before signing
Step #1 – Look at the Website
One of the first things a person should look for is the company’s website to check if company is legitimate. Start by researching the insurance company online. Look for their official website and read about their history, mission, and values.
Here, one can spot some telling signs about whether or not the insurance group is professional, credible, and reliable. When clicking around the website, consider:
- Website Design: Professional insurance companies have well-designed websites that are easy to maneuver. There should be very few pop-ups, the images should be high quality, and information should be easy to find.
- Clear Policy Information: It is important that a website includes a variety of information about the different policies offered by the company (i.e., everything from home to auto insurance might be offered by the companies).
- Contact Information: There should be clear information about the history and mission of the insurance company. Additionally, the provider’s website should have clear contact information so that people can call, email, or fill out online forms asking for additional information.
Additionally, users should never have to input too much personal information, such as a bank account number or Social Security number, to get a quote (Read More: How to Get an Auto Insurance Quote Without Giving Personal Information).
Usually, auto insurance companies will just request a ZIP code and other simple demographic information, such as your vehicle type, past accidents, and more, when providing a quote. The quote form should look similar to State Farm’s quote form above. If the form looks suspicious or asks for sensitive information, do not fill it out.
You should also be wary of extremely low quotes. If the auto insurance rate you receive seems too good to be true, it may be. Use a quote comparison tool to find the average rates that several companies would charge you, and make sure that quotes fall around that range when shopping at lesser-known companies.
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Step #2 – Verify Licensing
Next, you should check if the auto insurance company is licensed to operate in your state. Contact your state’s insurance department or regulatory agency to confirm if the company is licensed and authorized to sell insurance in your state.
Learn More: What are the worst auto insurance companies?
Your state insurance department can provide information about the company’s licensing status and any complaints filed against them when you inquire about any complaints or legal actions against the company.
The state insurance department can also provide additional information or warnings about problematic insurers. A company with legal actions taken against it should be avoided, as it could have scammed other customers.
Step #3 – Check Ratings
Another way to check to see if it is a legitimage auto insurance company is to assess the insurance company’s financial stability by reviewing its ratings from independent rating agencies such as A.M. Best. These ratings indicate the insurer’s ability to meet its financial obligations.
Learn More: Best Auto Insurance Companies According to Consumer Reports
You should also check ratings from sites like BBB or NAIC to see customer satisfaction ratings. To give you an idea of what ratings look like at the top companies in the U.S., we’ve collected scores from rating agencies.
Top 10 U.S. Auto Insurance Provider Ratings
Insurance Company | J.D. Power | BBB | Consumer Reports | NAIC Complaints | A.M. Best |
---|---|---|---|---|---|
Allstate | 820 | A+ | 80/100 | 1.25 | A+ |
American Family | 835 | A+ | 81/100 | 0.85 | A |
Erie | 851 | A+ | 88/100 | 0.3 | A+ |
Farmers | 819 | A+ | 79/100 | 1.12 | A |
Geico | 827 | A+ | 78/100 | 0.66 | A++ |
Liberty Mutual | 806 | A | 73/100 | 1.5 | A |
Nationwide | 812 | A+ | 77/100 | 0.68 | A+ |
Progressive | 823 | A+ | 76/100 | 1.2 | A+ |
State Farm | 835 | A+ | 82/100 | 0.67 | B |
USAA | 890 | A+ | 89/100 | 0.15 | A++ |
Generally, you’ll want ratings similar to the ones shown above when checking if a company is legitimate. Use the top auto insurance companies’ ratings as a guideline when considering smaller companies that aren’t as well-known. You’ll want your ratings to be similar to the ones below:
- J.D. Power: A rating of 800 or higher.
- BBB: A rating of A or higher.
- Consumer Ratings: A rating of 70 or higher.
- NAIC Complaints: A complaint ratio of 1.0 or lower.
- A.M. Best: A rating of A or higher.
The ratings above suggest a company is financially stable, provides good customer service and addresses claims satisfactorily. Lower ratings could indicate issues with financial management or customer service.
As well, if a company isn’t rated on at least one of the major rating sites, it may not be a legitimate company. If you can’t find insurance ratings from the reputable sites we’ve discussed, this is a red flag that the company may be a scam.
Step #4 – Check Reviews
It is important to read up on any auto insurance company one is considering. Look for reviews and ratings of the company from policyholders and other reputable sources. This can provide insights into their customer service, claims handling, and overall satisfaction levels. This is a chance to read current or past customer feedback as well as articles from experts in the industry.
Reading several reviews will help a person select the best insurance policy for him or her. Reviews should include information about the company's services, customer service, and quotes or rates.Dani Best Licensed Insurance Producer
Similarly, it will help to talk to friends, family members, coworkers, and neighbors about who they have worked with in the past. Ask friends, family, or trusted professionals for recommendations and their experiences with auto insurance companies. Their insights can help you make an informed decision.
Read More: How to Research Auto Insurance Companies Before Buying
They can warn people away from less-than-legitimate groups and can provide recommendations for a legitimate car insurance company if they enjoy their current provider.
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Step #5 – Check Policy
A reputable auto insurance company will be specific and clear in the written insurance policy. This is a chance to read up on what is and is not covered by an auto insurance plan.
For example, some policies will only cover car-on-car collisions and not accidents like a tree branch falling on the vehicle. Additionally, some plans will cover glass and some will not.
It is important that a car owner asks questions and thinks about what coverage is needed. A car insurance policy should be customized to a person’s specifications.
Read More: What does proper auto insurance cover?
Legitimate companies offer all policies in writing and are incredibly detailed about what is included. For instance, one may not want medical bills covered with MedPay if they already have great life and health insurance. A legitimate auto insurance company is one that will protect the interests of its customers.
This ensures that a stressful situation like an accident can be dealt with quickly and without tons of paperwork. The best group is one that has a lot of experience, has a proven track record, and is honest about its policies.
Auto insurance is a huge investment. Car owners need to do careful research so that they end up working with industry leaders.
Giving an insurance provider a call is also important. This is a chance to ask questions about everything from the quotes or rates to the filing of claims and specifics of the coverage. The company should provide plenty of information about how it calculates auto insurance premiums, available coverages, and more.
When talking to staff, one needs to pay attention to the staff member’s professionalism. The auto insurance company should be honest and clear about their plans and how they conduct business.
At no point should the potential customer feel uncomfortable. Transparency and direct communication are important when talking with legitimate or reputable insurance groups. One’s gut reaction is usually correct.
What to do if an Auto Insurance Company isn’t Legitimate
If you suspect an auto insurance company is illegitimate or engaged in fraudulent activities, it is important to take the proper steps to report them. If you suspect an auto insurance company isn’t legitimate, follow the following five steps:
- Gather Evidence: Collect any supporting evidence that raises suspicion about the company’s legitimacy or fraudulent practices. This can include correspondence, policy documents, payment records, or any other relevant information.
- Contact State Insurance Department: Reach out to your state’s insurance department or regulatory agency to report your concerns. Provide them with detailed information about the company, including their name, contact information, and the specific issues you suspect. The insurance department can investigate the matter further and take appropriate action.
- File a Complaint: File a complaint against the insurance company with your state insurance department or other relevant consumer protection agencies (Read More: How to File a Complaint Against Your Auto Insurance Company). Provide them with all relevant documentation and details of your experience. This helps create an official record and can assist other potential victims.
- Consult Legal Advice: Consider seeking legal advice from an attorney specializing in insurance law. They can guide you on the best course of action based on your specific situation and help protect your rights.
- Warn Others: Share your experience and concerns with friends, family, and online communities. By spreading awareness, you can help others avoid potential scams or fraudulent insurance companies.
Remember, it is essential to act promptly if you suspect fraudulent activities from an auto insurance company. Taking swift action increases the chances of protecting yourself and preventing further harm to others shopping for auto insurance.
Finding The Best Legitimate Auto Insurance Company for You
It is important to read up on any auto insurance company one is considering and check if they are legitimate (Read More: How to Choose an Auto Insurance Company). One of the first things a person should look for if they suspect that auto insurance is a scam from a company is its website.
The auto insurance company should be honest and clear about their plans and how they conduct business.
The right insurance company has a variety of auto insurance policies or plans to help a car owner protect him or herself, trustworthy business practices, and economical rates.
Not sure where to start with looking for a legitimate auto insurance company? Find quotes from legitimate car insurance companies using your ZIP code in our free auto insurance comparison tool.
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Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Frequently Asked Questions
What are some steps I can take to check the legitimacy of an auto insurance company?
When it comes to how to check if a company is legitimate, there are steps you can follow to check the legitimacy of an auto insurance company: look at the website, verify licensing, check ratings, check reviews, and check policy.
How important is it to verify the legitimacy of an auto insurance company?
Verifying the legitimacy of an auto insurance company is crucial as it helps ensure that you are dealing with a reputable and financially stable provider. It helps protect you from potential fraud or scams and ensures that your insurance coverage is valid and reliable.
Is cheap auto insurance legitimate?
Unusually low auto insurance rates can be a sign that the company is not legitimate and is committing premium division, where customers pay for low rates only to find out the company is not actually insuring them because it’s a scam.
However, there are plenty of cheap car insurance companies that are legitimate insurance companies offering great deals. Read our article on the cheapest auto insurance companies to find a great deal on coverage.
What are red flags to watch out for when evaluating the legitimacy of an auto insurance company?
While evaluating the legitimacy of an auto insurance company, be wary of the following five red flags:
- Unlicensed operation
- Poor financial ratings
- Complaints and legal actions
- Unrealistically low premiums
- Pressure tactics or unsolicited offers
Anytime there is a lack of transparency with a company, you should be wary of them. Never sign up with an auto insurance company if you aren’t sure about them.
What should I do if I suspect an auto insurance company is illegitimate or engaged in fraudulent activities?
If you suspect an auto insurance company is illegitimate, make sure to gather evidence and then contact your state insurance department to file a complaint.
Can I rely on state insurance departments to verify the legitimacy of an auto insurance company?
State insurance departments play a crucial role in regulating and overseeing insurance companies (Learn More: Who oversees auto insurance companies?). While they provide valuable information and licensing details, it is still recommended to conduct your own research and due diligence.
State insurance departments may not catch every potential issue, and personal research allows for a more comprehensive evaluation of an auto insurance company’s legitimacy.
Is Provide auto insurance legit?
Provide Insurance is not actually an auto insurance company. Instead, it provides quotes from multiple companies. We recommend that you verify a company is legitimate after getting quotes.
Is there Walmart auto insurance?
Walmart doesn’t sell its own auto insurance; rather, it works with auto insurance companies to provide quotes. If you are interested in shopping for a reputable auto insurance agency, compare rates now with our free quote tool.
What insurance company is most reliable?
Nationwide, Allstate, and Progressive are some of the more reputable and reliable companies on the market (Read More: Who are the reputable auto insurance companies?).
What is the #1 auto insurance in the US?
State Farm has the largest market share in the US and is a legit insurance company. Other legitimate companies that are popular among consumers are Geico, USAA, and Liberty Mutual.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.