Knowing your Auto Insurer Ratings Can Make or Break a Policy

Analyzing company ratings is a great way to make up your mind on which insurer to sign a new policy with. Reviews offered by professionals and independent evaluators are one of the best ways to classify insurance companies. This article will show how to read and analyze auto insurance company ratings.

Two major rating types are taken into account when it comes to auto insurances – those given by financial evaluators and those that reflect the consumers' opinion. The former are scientific reviews of how a company performs at the current time, together with future predictions, while the latter is a more subjective view on the quality of services, as perceived by the general public.

Financial ratings

Independent evaluators like Standard & Poor's, Moody's or AM Best publish reviews that assess an insurer's abilities to meet contractual terms and predict how the company will act in future. If a certain insurer is going to run into financial difficulties, this is the first place where you will learn about it.

These ratings are a goldmine in both the B2B and B2C market. Businesses need to know how an insurance company is going to do in the near future so that they know whether or not to invest in them. With the help of these reports, consumers can tell if a company is going to run into trouble and can make an educated decision on whether or not they should work together.

Rating AA and A+AM Best uses a grading system that starts at A++ ("excellent") and goes down to D ("do not use"). Insurers graded B+ and above are considered "secure", while the rest are vulnerable. Next to the financial rating, AM Best also divides insurance companies into fifteen "financial size categories" based on the adjusted policyholders' surplus (PHS), an indicator that describes the company's size in terms of its surpluses reflected in equity and related accounts.

Customer surveys

Companies like JD Power or Consumer Reports conduct frequent surveys on how consumers perceive the services of a certain company. When it comes to auto insurers, the final grade is given by a series of factors such as:

the range of offerings: how varied are the company's offers? Do they focus on the general public or only a narrow segment? the pricing: how do the fees they charge reflect the quality of the services? Are they reasonably priced? the billing and payment process: do the bills arrive on time? Do the bills include hidden charges? What payment options does the insurer offer? the availability of the support department: do they answer inquiries promptly? Is it easy to reach a live person or do you have to work your way through an automated menu? Are they open 24/7?

Highest rated insurance companies

There are many excellent insurers that operate in the United States. In fact, there are so many great companies out there that you don't need to compromise on quality and even consider going with a B- or lower company. In no particular order, these are some of the best rated insurance companies on today's market.

Amica

Amica is the oldest noteworthy insurer on the North American market, with more than a hundred years of history. They operate in all states but Hawaii, yet they have very few agencies throughout the country. Most business is done over telephone – but since we are living in the digital age this shouldn't be a problem for anyone.

Amica tends to be picky with customers. They are known to refuse to insure drivers with several accidents in the past or even those with more than a few tickets. They also take credit history into account when determining the eligibility of new customers, so people who have been sluggish with paying their bills might have a hard time working with Amica.

Amica received a full five-star rating from JD Power and has been holding the number one spot in customers' preferences for the last nine years. AM Best rated them an A++, the highest grade available. In other words, you can never go wrong with Amica.

GEICO

GEICO is another huge company that has recently received another boost in popularity with their funny commercials and the reptilian mascot, The Gecko. They pride themselves in the enthusiastic and unbeatable customer support.

GEICO offers their customers a wide range of discounts. If you have installed anti-theft devices, have taken defensive driving courses, are enrolled in the army, have graduated college or are still a student but have good grades then you may be eligible for consistent rebates.

GEICO received an A++ from AM Best and is among the top insurers according to JD Power's surveys.

Allstate

Allstate is yet another great insurance company, with great ratings from all reviewers – AM Best rated them an "A+" (superior), Standard & Poor's an "AA-" (very strong) and Moody's an "Aa3". Allstate is also on top of consumers' preferences, according to JD Power and Consumer Reports.

Allstate were the first to understand that accidents can happen even to the best drivers – after all, we all know that "to err is human". Hence, they introduced the so-called Accident Forgiveness Program, a system under which good drivers don't have their premiums raised after an accident where they are at fault. Moreover, Allstate pays you to drive carefully – after every six months without claims you will receive a check of around 5% the premiums you have paid for that period.

You should remember that these three companies aren't the cheapest on the market. You wouldn't even have to dig hard enough to find cheaper ones. However, going with the lowest price is usually a poor idea – companies that sell their services a lot cheaper than the rest tend to compromise on quality. If you go with a less known insurer just for the sake of a few dollars saved then you may find that they are less than responsive when you file a claim, their support department isn't as good as others' or simply that they just don't treat you with the respect you deserve.