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. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. How much do changes in interest rates affect the profitability of the insurance sector?

    Learn about the relationship between interest rates and insurance company profitability, and how interest rates can affect ... Read Answer >>
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

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

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about insurance to protect their residence.
  3. 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.
  4. Insurance

    For Top-Notch Insurance Coverage, Compare Quotes

    Find out how to use and compare policy options to get the best coverage at the best price.
  5. Insurance

    Do You Need Casualty Insurance?

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

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
RELATED TERMS
  1. Insurance Premium

    The amount of money that an individual or business must pay for ...
  2. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Assigned Risk

    A risk that an insurance company is required to provide coverage ...
  5. Classified Insurance

    Insurance coverage provided to a policyholder that is considered ...
  6. Cover Note

    A temporary document issued by an insurance company that provides ...
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  3. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  4. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  5. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
  6. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced within a country's borders in a specific time period, ...
Trading Center