Auto Insurance RatingAuto insurance companies rate cars and trucks in order to set premiums for motor vehicle policies that they cover; however, car insurance companies themselves are also rated. Car insurance companies receive a rating from business credit rating and customer satisfaction reporting agencies.
Auto Insurance Rating Details
Ratings that are assigned to car insurance companies help automobile owners and licensed drivers determine how reliable a car insurance company is. Some ratings also reveal how satisfied customers are with particular insurance companies. Organizations that rate auto insurance companies include:
- Standard and Poor’s.
- J.D. Power and Associates.
- A.M. Best.
J.D. Power and Associates gather data from auto insurance policyholders around the country. They take the data and rate insurance companies based on several factors including:
- Coverage options offered to consumers.
- Average price of insurance policies.
- How satisfied respondents are to the way that the insurance company handles auto accident claims.
- Satisfaction policyholders have with representatives at the insurance company (e.g. insurance claims adjuster, insurance agent).
Standard and Poor’s and A.M. Best rate the financial strength of auto insurance companies. A good rating with these agencies tells current and prospective auto insurance policyholders that the company has a strong likelihood of being able to pay for damages caused during an auto accident. This is an important factor to consider.
Not only do you want to ensure that you meet state auto liability insurance guidelines, you also want to be sure that the coverage you have is more than mere numbers on paper. You want to make sure that you secure a policy with an auto insurance company that is solvent.
Quality Auto Insurance Service and Products
As you're shopping for car insurance, you can also check with your state insurance department to review how auto insurance companies are rated in your state. Similar to the J.D. Power and Associates ratings, state car insurance ratings are based upon customer satisfaction.
For example, a car insurance company that receives 100 complaints for each 1,000 auto claims it processes might not be the company you will want to gain coverage through. If you plan on relocating to another state soon, also check ratings for insurance companies in that state.
Of course, you can also talk with family, friends, and colleagues and gauge their satisfaction with car insurance companies that you are thinking about taking out a policy through. But companies like J.D. Power and Associates and state insurance departments will give you a larger sample to base your decision upon.