A:

Picking an insurance company to use is not an easy task, considering the financial crisis of 2008 and 2009. Several financial institutions and insurance companies have gone out of business, merged with stronger firms or sold particular divisions of their company outright. Don't get too scared; state guaranty funds will pay claims up to a certain limit if your insurance company goes under. Here are some other factors to consider:

When choosing your insurance carrier, there are several factors that you should consider to help you make a wise decision. Consider some of the following:

  • What is the quality rating of the insurance company, as published by the main rating agencies in comparison with their peers? (Moody's, Standard & Poor's, & AM Best - claims
  • Paying ability, financial strength, assets etc…)
  • Is the insurer a specialist in this area of insurance coverage?
  • Is it easy to speak to a "live" person and will you be working with the same person (agent)?
  • Will it provide insurance coverage that is adequate for your needs?
  • Is its policy premium cost effective when compared to similar insurance companies?
  • What are the deductibles?
  • What is the claim paying process?
  • Does the insurer give family discounts on premiums for multiple policies?
  • If proximity is an issue for you, is there a local office nearby?
  • Consider the company's record for claim refusal. Your state insurance commission may have a record of complaints

This question was answered by Steven Merkel

RELATED FAQS
  1. Should I be worried about my insurance company?

    Yes, policyholders should also take a serious look at the financial stability of their current insurance company especially ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. Which insurance policies do I really need?

    Your needs for insurance depend on your situation and can't be generalized for everyone, but there are a lot of options available. ... Read Answer >>
  4. What is the main business model for insurance companies?

    Read about the most important components of an insurance company business model, such as risk pricing, float investing and ... Read Answer >>
  5. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
  6. What caused the European / Eurozone debt crisis?

    Understand how insurance companies price insurance premiums, and learn the importance of data and statistics in the insurance ... Read Answer >>
Related Articles
  1. Insurance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  2. Insurance

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  3. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  4. Insurance

    Term Life Insurance: Everything You Need to Know

    Term life insurance is an affordable way to financially protect your loved ones after your death. Here's what you need to know before purchasing a policy.
  5. Insurance

    How To Compare Home Insurance Companies

    There's a ton of information out there. Here's how to organize it and find the best company and best rates when you insure your home.
  6. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
  7. Insurance

    Do You Need Casualty Insurance?

    Find out how different types of coverages can protect you and which policy is right for you.
  8. Insurance

    4 Things That Keep You From Getting Life Insurance

    We look at four common reasons people give for not applying for life insurance, and see if they're legitimate.
RELATED TERMS
  1. Assigned Risk

    A risk that an insurance company is required to provide coverage ...
  2. Insurance Industry ETF

    A sector-following fund that invests primarily in insurance companies, ...
  3. Cooperation Clause

    An insurance contract clause that requires the policyholder to ...
  4. Cover Note

    A temporary document issued by an insurance company that provides ...
  5. Life Insurance

    A protection against the loss of income that would result if ...
  6. Cumis Counsel

    Legal counsel chosen by the insured when the insurer has a conflict ...
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and eventually eliminated tariffs to encourage economic activity ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  6. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
Trading Center