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Researching auto insurance carriers

Financial Ratings

Whenever there is a transfer of money from an insurance carrier to any type of rating entity, they have to be suspect. So forget about financial ratings. Did you know car insurance companies buy those? Some very find smaller carriers that choose not to waste money on a financial rating, can have great service and claims.

And even if a poorly run insurance carrier goes under, they are quickly devoured by larger more stable companies, usually via arrangement of the state department of insurance. Use financial ratings like Moodys, S&P, Fitch, etc. if you are actually going to buy stock in the company. But almost useless for a policyholder.

Body Shops

You really want to know if your car insurance carrier pays claims or fights policy holders. My #1 tip, call an auto body shop, or even go in person, and ask if your insurer pays slow or not at all! Find out about the claims-paying practices of the insurance company. Because what good is low premiums if the carrier will always fight your claims, or slow pay?

New car dealers also deal with insurance claims and can be a good source of info. And they can be friendlier than body shop guys.

BBB Ratings

The problem with the BBB, companies buy membership. And if you've ever made a complaint to the BBB, you know that they protect their paying members. They weren't getting paid by me, and I got shot down. BBB complaints get "resolved" if they simply respond to your complaint in any way, shape or form, which often comes from a refusal to do anything about your complaint. While BBB rankings are a farce, they still can be useful since they show # of complaints.

Hate sites

I love hate sites, they are very entertaining. Usually someone's like has been ruined by an insurer who has refused a claim, and they make it their mission to publish StateFarmSucks.com or the like. Don't discount the hate site as mere entertainment. Often they contain tragic events that happened to real people. And if a carrier has a few hate sites on the net, that is smoke my friend.

Department of Insurance

You can also go to your state department of insurance and check out complaints. When you go to your state's Department of insurance page you want to see:

• Does company settle claims quickly?
• Is there a frequency of complaints in one area?
• Does it refuse to pay certain claims?
• Does the Carrier have problems with sales practices; or
• Does the Carrier have problems with customer service?

The list above shows you car insurance is much more than premiums. There is after the sale, renewals, and a zillion customer service issues. Auto insurance is a high service business.

Friends & Family

Just because a friend or family member has dealt with the company in the past, doesn't mean you will get the same treatment or adjuster in case of an accident. And we are talking perception. Great service to your grandma might mean something very different than your definition. Especially if you have different goals. And if you have a different risk profile than your uncle, your car insurance company, might treat you like a 2nd class customer.

JD Powers

Another great resource that is uncompromising as far as I can tell, is JD Powers car insurance rankings. They survey actual customers, and offer some surprising results. Like if you thought Progressive was the cheapest, nope, They are only average in car insurance premiums (to pay for all that advertising). My cost analysis confirms many of JD Powers rankings, so I find them reliable.

Saying Goodbye

If you are mistreated, that's fine there are plenty of other car insurance carriers that will fight for your business. Even if you are a high risk driver. But before you make the switch your car insurer, make sure you ask about penalties.

Written by Craig J. Casey

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

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