Knowing how to choose insurance company is not an easy task, nor is it an exciting one, but you will be glad you took the time to find the right one for you 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. Consider some of the following:
- What is the quality rating of the insurance company, as published by the main rating agencies (Moody's, Standard & Poor's, and AM Best), in comparison with their peers? This rating indicates the ability of the provider to pay a claim and the potential longevity of the company.
- Is the insurer a specialist in this area of insurance coverage? If you require specific or less common coverage, be sure the company you're considering can meet those needs.
- Is it easy to speak to a "live" person and will you be working with the same person (agent)? With today's technology, it's easy to find yourself wading through voicemail prompts instead of talking to a real person. Using a company that provides you a personal agent to talk to can be very valuable when you have a problem or need to file a claim.
- 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.
- What are the deductibles? 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.
- What is the claim paying process? Every insurance company sets up its own claim paying process, some of which may be easier to deal with than others. If you have had an accident or suffered an injury or property loss, the easier the process the better.
- 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 have a face-to-face conversation. If you like this type of interaction, make sure the closest office isn't 40 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.
One of the best ways to find an insurance company is to ask your friends or family members for recommendations, but in the end, you need to find a provider that is right for your particular situation.
(For related reading, see: How to Find the Right Car Insurance.)