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Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in...

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Chris Harrigan has an economy 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...

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Reviewed byChris Harrigan
Former Insurance Claims Managerhttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/cicompaniescom-live/1f43458a-chris-harrigan23.jpg

UPDATED: Feb 18, 2019

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

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

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.

When trying to choose a car insurance company, it’s important to get feedback outside of the companies advertisements. This makes it easier to make a decision.

As a smart consumer, you should always do some your research before selecting the final provider of your new car insurance policy.

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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. 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.

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?

There are four large agencies who issue car insurance company ratings.

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.

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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.

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. http://www.ambest.com/home/default.aspx
  4. http://www.jdpower.com/
  5. https://www.standardandpoors.com/en_US/web/guest/home
  6. https://www.fitchratings.com/site/insurance

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