Ratings of Car Insurance Companies

I’m sure most of you would have realized that not all car insurance companies are made the same. Even with the same coverage options, the insurance quotes that you get can vary wildly. The performance and the reliability of insurance companies also vary wildly as do the all important “pay-out ration”. Choosing the right insurance company to have your car insurance with is a vital financial decision that must not be taken lightly. For the normal consumer, there are so many different aspects of insurance companies that it isn’t even easy to ask the right questions let alone get the right answers.

Fortunately for us normal people, the car insurance industry is highly regulated. Most people don’t know that insurance companies are subjected to ratings companies much like public listed companies. These companies that rate the car insurance companies are highly respectable so consumers can trust what they have to say about them.

The first thing that consumers should do is to head over to rating agencies websites like Standard & Poor’s Ratings (http://www.standardandpoors.com ) and Fitch Ratings (http://www.fitchratings.com ) to get a sound view of the financials of your insurance companies. Naturally, you should only be interested in car insurance companies that are cash rich and avoid those that are running in the red all the time.

The ol’ “Have you heard of them?” question is still very relevant today. It would seem that there are many suburban car insurance companies springing up without any previous history. To call them a scam would be too harsh but it is safe to say that their reliability and performance records can never be as good as those companies that have been around for hundreds of years.

The next thing to do is to get the opinion of the people around you. You should ask questions like how reliable the company is with regards to claim, the speed of their processing, their claims management experience etc. You will actually find a wealth of information from people who are more than happy to share their experiences with you. For most it is just a question of opening your mouth to get the right responses.

The mistake that many consumers make is to make their insurance decision solely based on which insurance company can offer them the best rates. While it is important, what is more important is the previous history of the insurance company and how they handle claims. There is no point in getting the best rates but having huge problems with the company not keeping their end of the bargain and deciding to not pay out your claims.

It is also wise to log on to the individual insurance company’s website and download their quarterly and yearly reports for a read. It is a law that insurance companies must publish these reports so that consumers and also investors can get more information about the running of the company. Read through some reports and you will soon get a hang of what makes for a good and dependable car insurance company.

Lastly, you should go to the local Better Business Bureau to find a listing of their preferred or recommended car insurance companies. You will also find a list of car insurance companies that have had bad ratings by customers so you can stay away from those.