How To Avoid Insurance Rip-offs

By Author: Marcus Stalder
Total Articles: 491
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As you explore insurance rates, some small or new companies will be offering what seem to be great deals on insurance compared to the competition. This could be an excellent opportunity, or risky business. Your providers will run background checks on you to make sure you are responsible, both financially and in your driving, so that they can determine whether you are a safe investment. You should check them out too! Know how to evaluate a potential insurer to make sure they help their customers and are financially responsible.

There are a number of different agencies that exist and track the integrity of businesses, with each one offering different forms of evaluation.

Ratings are particularly useful when dealing with smaller insurance companies that may be offering lower rates, but are not financially stable. if your provider's finances are uncertain, you can't guarantee they will be able to fulfill your claims, hence defeating the security and peace of mind insurance is meant to provide.

A.M. Best

A.M. Best offers reputable third party evaluations of insurers' ability to meet their financial obligations ...
... to clients, and has a specific, grade-based ranking for companies.

To use A.M. Best's system, simply visit their web site's Consumer Insurance Center and type the company name in the search bar. A listing of companies will come up that fit your description, along with their rating.

The highest rankings are A++, A+ (superior), A, and A- (excellent). Most of the largest insurance companies have a classification of a B++ (good) or higher.

JD Power & Associates

Rather than having a single rating like AM Best, JD Power has a 5-point system (5 points being best) that evaluates five different categories for auto insurers.

Factors covered are:

* overall satisfaction
* contacting the insurer
* policy offerings
* billing and payment
* pricing

To look at JD Power's most recent findings, simply go to their website, click the 'insurance' tab, and click on 'Auto Insurance Provider Ratings' to see a listing of how all the companies rate in each of the categories.

Standard and Poor's

S&P is widely known and rates companies according to their financial integrity with a grade-based system similar to A.M. Best (from AAA to D). Their listings go beyond insurance to all industries, but you should definitely check out the ratings for potential insurers by visiting Standarandpoors.com and looking at insurance companies. Again, the smaller or newer the insurance company, the more important it will be to check its credit history and stability.

Other options

Although the three groups presented here are known for providing excellent and useful evaluation of insurance companies, there are others which are just as good, such as Moody's, Weiss, and Duff & Phelps, but the above three will give you a superior understanding of how reliable your insurance company is. Remember - auto insurance companies want to know about you in order to find out if you are worthy of their business, and you have every right to know the same about them.

Know how to evaluate lower auto insurance offers and make sure they're legitimate, don't worry about missing great deals or signing on to shady ones anymore!