Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Aug 9, 2021

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Key takeaways...

  • Some car insurance companies have very conservative models of risk
  • How a company is rated financially can really help provide some reassurance about their ability to pay a claim
  • Choosing a car insurance company entails a lot of research other than merely comparing premium quotes

When shopping for car insurance, you might be in for a surprise. Many companies are competing for your business. Unfortunately, they don’t always provide the best quotes or coverage. You should always be careful to make sure you know exactly what you’re getting.

Car Insurance companies are regulated by the government, but various external rating agencies also provide handy tools to help consumers in the car insurance comparison search. If you’re looking for insurance, you can get several quotes in minutes by filling out a single questionnaire. As a smart consumer, you should always do some your research before selecting the final provider of your new car insurance policy.

Enter your zip code above to get FREE car insurance quotes today!

Choosing a Car Insurance Company

How a company is rated financially can really help provide some reassurance about their ability to pay a claim down the road which can help make the car insurance comparison search easier.

Some tips include:

  • Call the State Insurance Regulation Department to verify the company is licensed and able to provide such coverage in your state
  • Check and research consumer complaints about the potential car insurance provider from state agencies, the Better Business Bureau, online forums and even ask friends for a referral.
  • Try to check the company’s financial status and ratings across all the major rating agencies

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Why Do Car Insurance Quotes Differ?

There are many reasons why car insurance quotes differ from one company to another. This becomes especially important when you assume you’re getting the same product. Why not just go with the cheapest annual premium? Much of the answer to this question is solely based on a company’s risk/profit model.

Some car insurance companies have very conservative models of risk while others are a little more willing to take on higher risk clients and adjust premiums. Larger companies can also handle more risk as they spread it across a wider base. If you have a claim, a smaller company might refuse to renew your policy due to low risk tolerance.

Car insurance ratings show a wide variety of things for investors, but for consumers, the essential items are a forecast of an insurance company’s ability to pay future claims and their customer service.

Who are the major agencies who publish car insurance ratings?

If you’re looking to see which company has the best reputation, there are four large agencies who issue car insurance company ratings. These companies look at customer reviews, what kind of comprehensive insurance or other products the companies offer, and insurance costs to come up with a summary judgment.

You may have heard the names before as these agencies often rate companies from almost every conceivable industry in the world.

A.M. Best

A.M Best provides independent opinions of a company’s financial strength and forecast of the company’s ability to meet future obligations. The scale in which A.M.

A.M Best ratings fall into these categories:

  • A++ and A+ (Superior)
  • A and A- (Excellent)
  • B++ and B+ (Good)
  • B and B- (Fair)
  • C++ and C+ (marginal)
  • C and C- (weak)
  • D (poor)
  • E (Under Regulatory Supervision)
  • F (in Liquidation)
  • S (Rating Suspended)

It’s important to note that newer car insurance companies often start in the middle so if you are considering a new car insurance company for coverage, a good or fair rating should be expected as it does take time to build a higher rating with A.M.

Compare Car Insurance Companies

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J.D. Power and Associates

Almost every major car insurance company has won a J.D. Power and Associates award for some level of customer service and when they do you will know as a J.D. Power award is an exceptional marketing tool for reassuring or attracting new customers.

J.D Power and Associates are one of the largest surveyors of companies in the world with a historical database of billions of data points to measure almost every aspect of the business.

Standard & Poor’s Ratings

Standard & Poor’s is one of the largest credit rating agencies in the world.

Currently, they have over 8,000,000 ratings on over 40,000 companies worldwide.

Fitch Ratings, Inc.

The Fitch Ratings Insurance Group is a provider of research and ratings on insurance companies worldwide providing ratings which fully incorporate unique elements of local markets to help distinguish their product from other rating agencies.

Choosing a car insurance company entails a lot of research other than merely comparing premium quotes.

Do your research and select a company who not only has the coverage you need but also has a high chance of being there when you need to make a claim.

How Do You Know Which Car Insurance Company Is Right for You?

Choosing a car insurance company entails a lot of research other than merely comparing auto insurance rates. Do your research and select a company who not only has the coverage you need but also has a high chance of being there when you need to make a claim. When you get quotes from different companies, you can compare prices and then see what the differences are in the coverage being offered. The type of vehicle, age (if you have a teen driver), and many other factors can change your pricing. This is part of why online calculators are so great. They return quotes from different companies based on the same information and requests. Then you know the auto policy you choose is similar to those you were comparing it to whether that means greater collision coverage, specialty parts, accounting for limited driving experience, or something else.

Enter your zip code below to get FREE car insurance quotes today!

References:

  1. https://www.statefarm.com/insurance/auto/resources/high-risk-auto-insurance
  2. https://www.allstate.com/tools-and-resources/car-insurance/ask-agent-premium-deductible-limit.aspx
  3. https://www.ambest.com/home/default.aspx
  4. https://www.jdpower.com/
  5. https://www.standardandpoors.com/en_US/web/guest/home
  6. https://www.fitchratings.com/site/insurance