How to Choose the Best Auto Insurance Company
Measure several companies by, (1) customer satisfaction, (2) consumer complaints, and (3) financial health. Save up to 20% on your auto insurance bill by comparison shopping.
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UPDATED: Oct 20, 2021
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Buying auto insurance is a complicated process unless you know what you are looking for.
There are many different ways to analyze and evaluate car insurance companies, but it is important to understand the way insurance companies are ranked before you make any decisions.
There are some basic qualities you should seek in an outstanding auto insurance company, including excellent customer service, low consumer complaints, and outstanding financial health.
Customer satisfaction can encompass a wide range of desirable qualities in a reputable auto insurance company. Most customer satisfaction surveys and reviews evaluate customer service, premium rates, claims to process, and overall perceptions of an insurance company.
Customer service is an extremely important characteristic of the highest rated auto insurance companies.
As a client, your primary contact with the insurance company will most likely be through the customer service department. As a result, you should look for an insurance company that has 24-hour customer service availability and customer service agents who are helpful.
How efficiently a company processes claims is also very important. Excellent auto insurance companies have their claims processing system automated, allowing you to file claims online, by telephone or in-person.
Automated claims allow you to estimate, receive authorization and submit bills online. This eliminates the time consumption and hassles that associate more traditional methods.
JD Powers and Associates performs an annual survey and evaluation of auto insurance companies, which they publish online. They interview thousands of consumers around the country and talk to them about their experiences with each car insurance company.
JD Power and Associates’ survey results include consumer satisfaction rankings about claims processing, customer service, premium rates, overall perceptions of auto insurance companies and ease of accessibility.
Insure.com also publishes a consumer satisfaction evaluation on their website. In their survey, they interview several thousand individuals about their car insurance experiences.
You should look for other third-party non-affiliated websites that release surveys based on similar standards.
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When doing your research on a car insurance company, be sure to look at their consumer complaints. Almost every insurance company has at least a few complaints filed against them.
Complaints include a variety of issues ranging from rate increases to deceptive business practices.
As a general rule, consumer complaints increase when a large-scale event occurs that results in large numbers of claims being filed, such as an earthquake or flood. But large numbers of complaints may indicate poor business practices or unstable financial stability.
The Better Business Bureau (BBB) is one source of information regarding consumer complaints about insurance companies. The Better Business Bureau is a national nonprofit organization dedicated to providing information to the public about businesses.
The BBB publish information about complaints on their website. They also evaluate businesses and have a certification program for businesses committed to providing high-quality customer service.
Another source of information regarding consumer complaints is the Department of Consumer Affairs. Every state has a Department of Consumer Affairs which regulates the insurance industry in their state.
These departments issue and monitor insurance agent and broker licenses. Your state’s Department of Consumer Affairs website provides detailed information about consumer complaints and lawsuits filed against insurance companies, brokers, and agents.
Insurance companies are financial entities. Their foundational job is to provide you with financial protection if you get involved in an accident.
They use premiums you pay to invest and create more income, which they hold in financial reserves that are used to pay claims.
The stronger an insurance company’s financial reserves, the better health they are in financially. Financial health is extremely important to an insurance company because, at any time, many policy-holders may file many individual claims.
Financially strong companies can weather these events and pay their claims, providing the financial protection their customers pay for.
For example, in the spring of 2011, the southeastern United States was hit with numerous tornados that resulted in billions of dollars in damage.
Financially healthy and stable insurance companies were able to quickly pay claims and help policyholders get back to their lives. Unhealthy insurance companies had difficulty paying claims and many went out of business completely, leaving their clients behind.
You can find out about an insurance company’s financial healthy by visiting the websites of independent companies that evaluate insurance companies and their financial practices. The three best-known evaluation organizations are Moody’s, Standard and Poor’s, and Fitch.
Insurance companies in superior financial health receive a grade of “A++” and have strong financial reserves, excellent credit, and highly praised financial practices.
When you are looking for the highest-ranked auto insurance company, it is important to consider a wide variety of aspects and qualities about insurance. Be sure to do your research ahead of time to get the best coverage possible!