Have your question or comment appear below!

How to check out an auto insurance company

The Roman Writer Publilius Syrus wrote: "A good reputation is more valuable than money."

Why is it important to find out about an insurer? Two words: Bad faith. If a carrier would rather pay their attorneys than claimants, it doesn't matter how cheap the premium is. You have a much greater chance of being a victim of bad faith, than your insurance carrier going out of business, leaving you (temporarily) without auto insurance.

Financial ratings like Moodys or Fitch, are near useless, and a conflict for the carrier that bought them. They are no indication of how the carrier will treat you. In fact, an insurer that low balls or gets out of paying claims might even have better ratings. How do companies like that stay in business? There are large carriers out there with powerful brands, loyal customers and huge margins that can afford to lose a few "problem" claimants.

• Hate sites. Google the insurers company name and if many hate sites, i.e. [insurancecompanyname] sucks.com, that would be a clue. One harte site is pretty normal, but several hate sites are an indication that several people were offended enough to start a mission against the insurance company. Read the tales of woe to see if there's a common denominator.


• Contact the local body shops of dealerships and find out which carriers beat them up or low ball them on repairs. You can find out which companies try and get the shop to user after market or off brand parts. Also ask which ones have the slowest pay outs.
  
  There is a certain investment in time because you have to make sure you talk to the person at the body shop that does the billing. It can't be done on the net.
  
  
• Use an independent agent, a member of the Independent Insurance Agents of America or PIA (Professional Insurance Agents). They'll know who pays claims without a knockdown, drag out fight. An adjuster is working for the insurance carrier, but the agent wants to keep you as a client.
  
  You can also change carriers and keep the same (independent) agent.You might get pressured to buy a policy, especially one that pays the biggest commission Independent agents may also charge a brokerage fee for their services
  
  
• Only use carriers that don't have an arbitration clause (waiving your right to sue), or one that will let you cross out that line in the policy. You will know whose interest the company has in mind when you find these types of clauses.
  
  Many carriers nowadays have this clause and it may reduce your choices. Find out if deleting the arbitration clause or waiver may void the policy.
  
  
• Use J.D. Power's auto insurance ratings. Their surveys include rating an insurer based on the value of services offered; the ability of the provider to fulfill commitments; the ease of working with the insurer; claims; billing practices; how well company personnel and agents treat consumers; price; and problem resolution. Numerical scores are based on perceived quality by consumers.
  
  
• Check out your State Department of Insurance complaint ratios. They will give you a broader view or insurers insurer conduct, and how they compare to their peers. Once consumers contact an attorney for representation, most State's will not assist you with a claim. So these ratios may not illustrate the worst cases of abuse be carriers.

In review:

• Hate sites;
• Financial ratings are worthless;
• Consider an independent agent;
• Use JD power ratings; and
• Check out your state's complaint ratios.

Written by Craig J. Casey

Financial Writer helping people with their insurance problems on the net since 1998.

blog comments powered by Disqus