Take the Time to Evaluate an Insurer Before You Buy

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Price drives the majority of auto insurance decisions. Research shows that customers who use the tools available to them online to get multiple rate quotes and to research given companies get better rates and are more satisfied with their coverage. But let’s face it. Web pages are marketing tools. Esurance auto insurance tells you they’re great, because they want your business. How can you really distinguish a good offer from a fly-by-night operation that won’t be there when you need them?

A Website You Can Trust: Your State Department of Insurance

Virtually every state has a department of insurance with a web site. One of the most valuable resources on the site for the consumer will be the “consumer complaint ratios” for all the insurers operating in the state. (You always want to make certain your company is licensed to do business in your state.) The ratio  represents the number of complaints received from consumers per 1,000 complaints filed. You may be surprised to discover that a big name does not necessarily mean good consumer service.

Chances are good that you’ve already put together a list of potential insurers in order of price. Use the consumer complaint ratio to re-order your list. A company with a high complaint ratio is too expensive a risk no matter how low their premium offer may be.

Talk to People You Trust

Even in the age of the Internet, word of mouth is not dead. The best person to give you advice on your auto insurance may well be the guy at your local body shop. He spends a lot of his time dealing with insurance adjusters and will have firm ideas about which companies file claims smoothly and pay for quality repairs rather than insisting on cheaper, after-market parts. While premium price is a huge factor in choosing your insurer, particularly during a recession, you also need to know that you will be well cared for if something does go wrong and you file a claim and need repairs to your car.

Turn to the J.D. Power Consumer Center

J.D. Power and Associates rate insurance companies on an annual basis. They look at such factors as price, coverage options, claims processing, and the quality of company representative interaction. This can give you a better idea of what you can expect when you actually have to deal with someone about a problem.

Look at the Insurer’s Financial Stability

There is no point in taking out a policy with an insurer that lacks the financial stability to actually pay out a claim. You can use both the A.M. Best and the Standard & Poor’s ratings for the company to gauge financial strength. A.M. Best uses the traditional letter grades, with A+ being the best. Standard & Poor’s best grade is AAA. The general rule of thumb is, don’t work with a company that has lower than a B+ rating from A.M. Best and less than BBB from Standard & Poor’s.

We’d all like for our automotive insurance to be an automatic experience. Find a good rate, punch a few buttons, get proof of coverage — done. But stop and think how much you rely on your vehicle and how expensive repairs are in today’s world. The precaution of additional research is vital to protect yourself from deep discount brokerages that do no offer quality coverage and won’t stand by you when you need it. For as cynical as it sounds, a deal that sounds too good probably is, and a premium that’s magically low is suspicious. You, as a consumer, have a wealth of tools available to you online that will allow you to choose not just the cheapest coverage, but the best coverage for your needs.