Insurance Rating Organizations

Help in Your Search for the Best Insurance Company

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If you are like most consumers, you find it confusing when trying to choose the best insurance company. This is true no matter what type of insurance coverage you may need; auto, homeowners, life, health or business insurance. Listening to advertisements on television or radio also does not seem to give much help. Everyone claims to be the very best - so where do you turn? Insurance rating organizations can give you an unbiased look at things like the financial stability, claims service and customer satisfaction ratings of an insurance company.

It is like an insurance company report card.

List of the Insurance Rating Organizations

There are many different insurance rating organizations where you can begin your research. Here are some of the better known insurance rating organizations:

Rating Factors

What type of information can insurance rating organizations provide you about an insurance company? Insurance rating companies look at a company's past financial performance to help determine the direction it is headed in the future. Each insurance rating organization uses its own criteria to judge financial stability and other important factors for an insurance company. That being said, there are several factors that all insurance rating organizations take into consideration.

  • Company Structure and Management Style: A company with a strong business structure and leadership team increases consumer confidence. In contrast, an insurance company who is constantly being bought and sold gives a sense of instability and customers may take their business elsewhere.
  • Claims Paid: If a company has too many claims to pay in any one financial quarter or year, it could reduce its creditworthiness and ability to pay creditors or future claims to policyholders.
  • Focus: Ratings organizations consider an insurance company's business focus. Too narrow of a focus could mean that the company will lose business if the market changes.
  • Financial Reserves: A company with strong financial reserves is able to meet all its financial obligations and pay claims for policyholders. This strong financial reserve will also help the company weather any difficult economic times or adverse market conditions without negative implications.
  • Comparison to Peers: Insurance rating organizations compare the financial performance of an insurance company with its peers - those who sell the same types of insurance and are similar in size and financial reserves. The best performers come away with the highest ratings.

The financial strength ratings from insurance rating organizations are very important to insurance companies. A weak financial rating could mean losing consumer confidence and reduce the company's ability to make a profit. A company with consistently high ratings from the insurance rating organizations year after year is one you can feel safe placing your business with. Customer service and customer satisfaction also places a role. J D Power and Associates awards customer satisfaction ratings to the top performers in each insurance category such as health, auto, home and life insurance.

Making Your Choice

Everyone wants to get the best value on an insurance policy.

Why make shopping for insurance any harder than it has to be? Use an insurance rating organization to find the top companies for each type of insurance. From there, you can narrow your search by defining your own criteria. You can judge how comfortable you feel with the customer experience when you contact the company for an insurance quote. Is the company customer friendly? Does it provide several payment options? You have to decide what is important to you in your insurance company. Remember to shop carefully and understand what you are buying. If there is something you do not understand when completing an insurance application, always be sure to ask. It is also important to provide accurate and detailed information to get the most accurate insurance quote possible.