Knowing how to choose an insurance company is not easy, 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 insurance provider. For example, you might ask what its quality rating is compared to its peers. This quality rating indicates the ability of the provider to pay a claim and the potential longevity of the company. Three of the main rating agencies are Moody's, Standard & Poor's, and AM Best.

Things to Consider When Choosing a Company

Another question to ask is if the insurer specializes in the area of insurance coverage you are considering. If you require specific or unique coverage, its best to not only verify that the insurer offers the insurance but that they can address your specific needs. For example, when looking for travel insurance, you should consider well-known companies like Allianz Global Assistance or Travel Guard, owned by AIG. Both companies were named among the best in travel insurance in 2018 by Forbes.

Key Takeaways

  • Shoppers looking for insurance can begin by reviewing the insurer's quality ratings as published by Moody's, AM Best, and Standard & Poor's.
  • When considering an insurance company, verify if it specializes in the type of insurance of interest.
  • Reviewing the premium schedule and applicable deductibles can aide in decision-making.
  • Also important is reviewing the company's claim's history and customer reviews.

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 as your representative or operate as 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 pay 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 policy deductibles?" The deductible is the amount a policyholder must pay before the insurance company pays on 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 claim-paying process. If you have an accident or injury, the easier the process the better. Find out the claims process 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 about 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.