How to Evaluate Auto Insurance Ratings

How to Evaluate Auto Insurance Ratings

When you apply for a car loan, the financing company will investigate your background. They will look at your credit history, your employment and your income to determine whether you are a safe risk. If you aren’t doing the same thing with your auto insurance provider, you could be making a serious mistake.

Auto insurance ratings allow consumers to determine whether they are purchasing insurance products from a reliable company. They apply universal standards to rate different aspects of each business, from customer satisfaction to billing practices.

Consumers can use auto insurance ratings to decide whether a particular company is a safe bet. If a company has received a low rating, you know that they are deficient in certain areas of practice.

Where to Find Auto Insurance Ratings

Several independent entities publish auto insurance ratings, and referencing two or more of these entities will give you a more comprehensive look at each insurance carrier’s reputation. With the reputation, the rankings of car insurance ni should be available at the online search engines. Automatic rankings are uploaded at websites to deliver the potential with fewer amounts. Different policies are delivered to the owner of the car to cover against the accidents at the road with other options. 

A.M. Best, for example, provides auto insurance ratings with regard to each company’s credit history. They evaluate whether or not a particular insurer is responsible with funds and financially solvent.

Then you have J.D. Power  amp; Associates auto insurance ratings. I never switch insurance carriers without first consulting this source, because it is the easiest way to get a broad overview of many different providers all in one place.

J.D. Power is different from A.M. Best because the former focuses on things like customer satisfaction and the diversity of policy offerings. Both sources are essential if you want to make sure you are doing business with a reliable and reputable insurance provider.

You might also want to check out Standard  amp; Poor’s, Consumer Reports and the Insurance Institute for Highway Safety (IIHS). These organizations provide data and statistics that can help you make your decision.

A Matter of Personal Preference

Auto insurance ratings are subject to interpretation. A category that one consumer finds important might not matter to another, for example, and you must assign your own weight to each area of evaluation.

If you are most concerned with pricing, you might want to assign more weight to the pricing category at J.D. Power, and you might not be as concerned with the financial strength rating at A.M. Best. If, however, you want to work with a company that offers a diverse range of policy options, you might focus on that aspect of auto insurance ratings.

Keep in mind that at A.M. Best, auto insurance ratings are classified by financial size. Smaller companies that have not been in the market for long will have lower financial size ratings, which can impact their overall grade in the credit score.

I tend to look for consistency across the board rather than top marks in just one or two areas. I want to do business with an insurance provider that ranks highly (if not at the top) for all categories rather than ranking at the top in one category and showing mediocre scores everywhere else.

Other Sources of Auto Insurance Ratings

Formal auto insurance ratings are not the only source of information you can use when evaluating insurance companies. The Better Business Bureau, for example, provides information about complaints processed through their organization, which can give you an idea of overall customer satisfaction.

You can also take an informal survey among friends and family, or even seek out opinions on the Internet. Check out recent news articles about the insurance company you are considering, and interview an agent before you agree to sign a policy.

Auto insurance ratings are not always based on exactly the same criteria you would want to consider before choosing an insurance provider. However, they do provide a jumping-off point for your research, as well as an objective point of view for you to consider.