Is There A Ranking System For Insurance Companies?

By Author: Norris Rios
Total Articles: 568
Comment this article

Anyone who follows music will know the Billboard charts show which singles and albums are selling the most. In other areas, there are ranking systems to tell you which goods or service providers perform the best. These are useful guides for both the newcomers and the experienced. They capture truth in an instant, like taking a photograph of the people who won the latest races or games. They won today, but who knows whether the same people will win tomorrow. When it comes to buying insurance, it would be useful to know which companies are ranked the best performers. In theory, they should give the best service, particularly during the claims process. But the first problem is the power of the individual US states. There's no federal regulation for the insurance industry. It's the responsibility of each state to decide which companies can sell policies in their jurisdiction. That immediately rules out a national ranking system. The largest insurance companies set up subsidiaries to sell in each states. Each is run separately to conform to local regulations. So how one subsidiary performs in one state is no guide to how different ...
... subsidiaries perform in other states. Worse, you cannot get round the problem by buying a policy across state borders. Put it all together and you can only rank the performance of the companies in the state where you live.

What should you look for to rank insurance companies? The first answer is financial stability. We are in the middle of a deep recession. You do not want to pay your premiums now only to find the insurer goes into bankruptcy protection just as you have your a traffic accident. Fortunately, the credit-rating companies include all the major insurance companies in their research. You will get general information from Moody's, Standard & Poor's and Fitch. The one company specialising in insurance is A.M. Best. It gives very detailed ratings based on all the key factors of service and financial prudence. Make sure you only deal with the insurers having the highest ratings.

Secondly, you want the companies with the fewest complaints against them. This means a virtual trip to the website of your state's Department of Insurance. This Department is responsible for licensing the insurance companies in your state and then regulating the way they do business. All the states operate a complaints system. The best states not only investigate conscientiously, but also publish lists of the numbers of complaints upheld against each insurer.

Why do insurers have good reputations? It's because they offer a good product at a good price. This will not always be cheap auto insurance, but it will usually be competitive terms at an affordable price. To maintain the reputation, their good marketing must be backed up by good service. You, the consumer, must be confident each company will handle your claims fairly and efficiently. It's difficult to build up the brand and its reputation. And all that hard work can be lost in days if there's adverse publicity about premium rate hikes and claims being refused. So once they become one of the top companies, they try to stay that way. Your strategy choice is therefore to look around for cheap auto insurance, or look for the best companies and see what they are offering.