What You Look for in an Insurance Company

What You Look for in an Insurance Company: Auto Insurance

Some of the factors to look at when evaluating car insurance companies include:

• Direct or Indirect Seller. A direct seller means there is no middle person. To purchase the insurance, file a claim or make adjustments to your policy — you’ll need to call the company directly. An indirect seller is a company that sells insurance through agents or brokers. If you like to take care of things yourself, or use company Websites to conduct business, consider a direct seller. If you prefer meeting with a local agent in your neighborhood, go indirect.

Examples of direct sellers include Geico and Esurance. Two large indirect sellers are State Farm and Farmers.

• Claims Service. You may go years without getting into an accident. But when you do, you’ll be thankful if you select a company with a good claims reputation. In addition to paying your claim, claims service includes how quickly they pay, the thoroughness of investigations, how soon they can see look at your car, and how easily they can be reached by phone. Looking at J.D. Power Rankings is a good way to see who has good claims service. You might also visit a local body shop and ask which companies they have had the best experiences with.

• Price. Car insurance is a major expense, and sometimes you need to save money above all other factors. After researching which type of company you prefer and how good their claims service is, get some quotes to find the right balance between price and service.

What to Look for in Home Insurance Companies

Few things are more important in life than protecting your home. Sleep easier at night by knowing that you have a good home insurance company.

• Financial Rating. Most insurance companies can afford to repair a few homes damaged by a fire. But what if a major storm damages every home in your neighborhood? If that happens, you’ll be glad that you purchased home insurance from a company with a strong financial rating, as this will help ensure that they have the money to repair your home. A.M. Best and Standard and Poor’s both track financial ratings.

• Reputation. When determining whether to pay your claim, there are often some gray areas when the company compares your damage to the language in your policy. Deciding whether the damage was caused by flood or by wind, in the case of a hurricane, for example, will mean the difference between having your claim denied ( flood) or being paid (wind). Check J.D. Power Rankings and also talk with local contractors to see whom they prefer.

• Availability. Depending on where you live, a home insurance company may send their own claim adjusters to view your damage, or they might hire an independent adjusting firm to look instead. Many independent companies are good at what they do, and in large disasters you may have no choice. But for smaller scale losses, ask whether their own adjusters will come to your house or if they will send independents.

What to Look for in Health Insurance

If you receive health insurance through your employer, you may not have a choice of which company to choose. For those who have employers who provide a selection of companies, or if you are purchasing an individual policy for yourself — here’s what to look for.

• The doctor and hospital network. In many ways, a health care plan is only as good as the doctors who are in the plan. Look and see how many health care facilities near your home are included in the plan. Check family doctors and especially look to see how many specialists are on the plan.

• Health care plans. Choosing which plan can be very confusing, but a good health insurance company will give you plenty of choices. This will allow you to make the basic decisions such as choosing between HMO and PPO. It will also allow you to choose a plan that fits your exact needs. If you are young and healthy and rarely see a doctor—maybe you want a cheaper plan that only covers major medical problems like hospital visits.

• Rates. Like auto insurance, health insurance is a sizable expense for many people. If you are hospitalized without health insurance, the bill could make you go bankrupt. For this reason, having some health insurance is far better than having no insurance. At the very least, pick a plan that you can afford.

What to Look for in Life Insurance

• Financial Strength. The single most important thing to look for in a life insurance company is financial strength. You’ll often buy life insurance that you expect to be good many years from now. Only purchase a policy from a company that will live as long as you.

External Resources

What you look for in an insurance company is financial strength, claims service, reputation, and price. You can see comparisons of these factors by visiting these Web sites:

• A.M. Best

• Standard and Poors.

• J.D. Power and Associates

• Weiss Ratings, Inc.