Knowing how to choose an insurance company is not an easy or exciting task, but you will be glad you took the time to find the right one if you ever need to file a claim. When choosing your insurance carrier, there are several factors you should consider to help you make a wise decision. A great way to start is to review the company. What is its quality rating as published by the main rating agencies (Moody's, Standard & Poor's, and AM Best) in comparison with its peers? This rating indicates the ability of the provider to pay a claim and the potential longevity of the company.
Things to Consider When Choosing a Company
Another question to ask is if the insurer is a specialist in the area of insurance coverage you are considering. If you require specific or less common coverage, be sure the company you're considering can meet those needs. For example, when looking for travel insurance, you should consider getting it from a well-known company, like Allianz Global Assistance or Travel Guard, owned by AIG. Both companies were named among the best in travel insurance in 2018 by Forbes.
In today's tech-heavy world, it is easy to find yourself wading through voicemail prompts instead of talking to a live agent. It is worth finding out if you can easily reach a live agent and whether that agent will be assigned to you rather than a random operator. Using a company that provides you with a personal agent to talk to can be valuable when you have a problem or need to file a claim.
What Are the Premiums and Deductibles?
An important thing to ask is, "Are the premiums cost-effective when compared to similar insurance companies?" While it is important to consider the amount you will be paying in premiums, this is not the only factor. Carriers that offer really low rates may be new to the market, or a policy with a lower premium may not provide as much coverage. Ask each potential insurer, "What are your deductibles on the policy?" A deductible is the amount you will be responsible for paying if you file a claim. A lower deductible often means you are paying a higher premium, and vice-versa, so you need to decide what makes the most sense for your situation.
Every insurance company sets up its own claim-paying process. If you have an accident or injury, the easier the process the better. Find out the process for claim pays upfront.
Other Questions to Ask
- Does the insurer give discounts on premiums for multiple policies? Having your car insurance, motorcycle insurance, RV insurance, homeowner's insurance, and even life insurance in one place can save you quite a bit in premiums if the company offers this type of discount.
- If proximity is important to you, is there a local office nearby? There is something to be said for being able to walk into your insurance agent's office and having a face-to-face conversation. If you appreciate this type of interaction, make sure the closest office isn't 20 miles away.
- Are there complaints against the company? Your state insurance commissioner may have a record of complaints against certain insurance providers. Also, consider the company's record for claim refusal—you don't want to file a claim only to have it denied by your carrier for something that's out of your control.
The Bottom Line
One of the best ways to find an insurance company is to ask your friends or family members for recommendations, but ultimately you need to find a provider that is right for your particular situation.