How to Pick the Right Insurance Company
Finding a reliable company that treats you well just takes a bit of research.
Most insurance companies sell the same products, but that doesn't mean they're all equal. It can be difficult to select which company you want to trust with the things you hold most dear.
Commercials and advertisements only tell you what the insurance company wants you to hear. Promises of savings and happiness only go so far when you have to file a claim. What you really want is a company that is honest, reputable, and can cover your claim quickly (find out How to File a Claim that Gets Paid Sooner).
But what do you look for? How can you tell the better options from the worse ones? Here are a few pointers that will help you figure out which companies are worth your hard-earned money and will protect you in the event that you need to use the insurance.
Your first step should be checking how strong the company is financially. If you ever experience a substantial loss, you need to make sure that the insurance company has enough funds lined up to take care of your claim.
A financially healthy company is also one that is more likely to have a long future. If you want to make sure you're not signing a policy with a company that might go under in the next ten or fifteen years, have a look at how they're doing (for a more in-depth discussion, see How to Choose an Insurance Company that Won't Go Out of Business).
How can you do that? It's simple. There are three independent companies that rate a company’s financial strength:
- A.M. Best
- Standard & Poor’s
You can find ratings by visiting one of these sites and entering the company's name into the search bar.
Keep in mind that insurance companies have different names for each of their product lines, so finding the correct one could be a bit of a hassle. The easiest way to get the information is by visiting the insurance company’s website and looking under their About Us section. You should be able to find their current financial strength ratings there.
You're also going to want to do business with a company that has excellent customer service. From the quoting process to the final claim resolution, it's important that you're treated well and made to feel welcome.
J.D. Power rates companies based on overall customer service experience. You might be familiar with the name from car commercials, but they rate other industries as well, including insurance. Visit their website and look up the company name to find out how they rate.
Another approach is to look for complaints against the company. One or two dissatisfied customers might not be a problem, but you might notice a pattern in the complaints or that they get a high volume of them. If you google the company's name with "complainant," websites like Consumer Affairs and the Better Business Bureau should be somewhere near the top of your results. They will list specific complaints customers have lodged, often with specific details about the customer's negative experience.
The National Association of Insurance Commissioners (NAIC) can also give you information about complaints against insurance companies. But I should warn you that the site is convoluted, so unless you know specifics it can be difficult to navigate.
Those Little Extras
If you narrow your search down based on financial strength and customer service ratings but still find it difficult to choose, there is one final thing to consider: the perks.
Insurance companies know that the coverage they sell is mandated by the state. These mandates are the minimum amount of coverage a company can offer. To differentiate themselves, many will offer some extras to make their products more compelling.
When you are on the fence, look at the specifics of the policy. And ask yourself these questions:
- Does the company offer an increased level of basic coverage?
- One of the simplest ways insurers get an edge over the competitors is by offering better coverage amounts
- Are there added features?
- Added features will vary with an insurance product, but could include free roadside assistance as part of a basic auto insurance policy
- What long-term benefits are available if I keep my policy with them?
- Some insurers will reward loyal customers with savings the longer they do business with them
Most insurance companies will charge you less if you bundle policies together. If you're interested in more than one kind of coverage, be sure to ask about this. Choosing a company that lets you bundle your policies could reduce your monthly premium, which is nothing to scoff at (for related advice, see How to Lower Your Health Insurance Rates).
Buying insurance is a big commitment. Depending on the kind of coverage you get, it could last you for years or even the rest of your life. It's worth making sure you pick the right company, so take the time to do a bit of research and find a company you won't regret doing business with.
(For more helpful advice, check out these Top Twitter Feeds to Follow for Insurance Information.)