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. How can I use zero-based budgeting for my own finances?

    Learn the difference between a copay and a deductible, two very common features of most health insurance plans in the United ...
  2. What are the restrictions for naming a given individual as my contingent beneficiary?

    Understand what restrictions may exist, depending on your state and the policy you choose, on naming your life insurance ...
  3. What debt/equity ratio is typical for companies in the insurance sector?

    Learn about the average debt-to-equity ratio among insurance providers. Find out about the ranges of D/E among insurers and ...
  4. How does the risk of investing in the insurance sector compare to the broader market?

    Discover the risks of investing in the insurance sector compared to the broader economy. Insurance stocks thrive when short-term ...
RELATED TERMS
  1. Exposure Trigger

    An event that causes a policyholder’s insurance coverage to kick ...
  2. Beach Plan

    Property insurance for coastal property owners who have a high ...
  3. Following Reinsurer

    A reinsurance company that signs onto a reinsurance treaty, but ...
  4. Cape Cod Method

    A method used to calculate loss reserves that uses weights proportional ...
  5. Spot Reinsurance

    A reinsurance agreement that covers a single peril.
  6. Special Acceptance

    The extension of coverage for a peril that is not generally covered ...

You May Also Like

Related Articles
  1. Budgeting

    How can I use zero-based budgeting for ...

  2. Professionals

    How Financial Advisors Pick Client Investments

  3. Active Trading Fundamentals

    Who are Berkshire Hathaway's (BRK.A) ...

  4. Active Trading Fundamentals

    Who are Morningstar's (MORN) main competitors?

  5. Investing Basics

    Which insurance companies pay the highest ...

Trading Center