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. 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. 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 >>
  4. 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

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  2. Insurance

    Exploring Advanced Insurance Contract Fundamentals

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

    What To Do When Your Insurance Company Won't Pay

    Struggling to get a claim honoured? Find out what you can do.
  4. Insurance

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  5. 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.
  6. 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.
RELATED TERMS
  1. Bureau Rate

    A standard price per unit of insurance set by a state's insurance ...
  2. Assigned Risk

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

    A contract (policy) in which an individual or entity receives ...
  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. Total Insurable Value

    Total insurable value is the value of property, inventory, equipment, ...
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  2. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  3. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  4. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  5. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  6. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
Trading Center