There are several rating systems for insurance carriers. Insurance companies, like to other financial companies, may be ranked based on specific financial and customer service criteria. The most critical criterion to evaluate insurance providers is \’financial strength\’. The most recognized agencies that rate insurance institutions are 1. Standard And Poors, 2. Fitch Rating, and 3. AM Best ambest.com.

Certain other rating institutions adopt different procedures. JDPower jdpower.com presents rating system for insurance companies that includes points based on claim paying procedures, or what they call \’auto insurance claim rating.\’

High or low financial strength is connected to the creditworthiness of the insurance institution, its financial strength and its power to settle the customers\’ claims. The fact that an insurer has high credit rating is not a mark of better or worse claim paying practices. Without a doubt, with specific insurance carriers, strong financial rating may be the result of rigorous claim paying policy. There are many instances of insurance companies who had B rating with AM Best but had great customer services with very reasonable claim paying policies, while other insurers with an A rating (better than B), that maintained very poor claim paying practices to the point where these insurance providers got barred from certain states and subjecting them to high fines for their poor claim payment policies.

Some clients believe financial strength is the most crucial factor while others think that customer service rating is the one that is more important. So for consumers which one is more important, claim payment history or financial strength? The answer to this question is: Everything is based on the following:

a) Client\’s Needs Vs Insurer\’s Offering. Certain clients have specific needs that are met by a particular company. If a customer has a need that is better met with policies offered by Company A, then getting a policy from that insurer is the final solution regardless. In this situation the consumer does not have a choice.

b) Limits of Insurance. If limits of coverage is high (ie millions or hundreds of thousands), then insurers financial strength is more critical. A customer who is insuring his $3,000,000 building has to worry more about the financial strength of the insuring provider. A customer insuring a $1,000 motorcycle has to think more about claim payment history of the insurance company.

c) Insurance Rates. Affordability of the coverage should be of higher value when doing business with similar insurance carriers which are slightly unique in their financial rating. There could be slight differences between insurance carriers who have A+ rating or A++ (with similar adequate claim paying policies).

d) Confidence. Buying insurance is a personal preference. When factors related to the financial strength and claim payment practices are relatively close to each others then the confidence of the insured in a specific firm or agent will be the primary element in the choice.

Independent Agents Vs Captive Agents. Whether you require a business insurance quote or car insurance quote, doing business with a qualified independent broker can be the answer to your questions. Doing business with a captive agent means, in most instances, that you have the profile of one company. Dealing with an independent broker permits clients to get more portfolio from more insurers.

Author Bio: Author is member of Insurance Navy, a Chicago leader of business and auto insurance. You can get information about on line car insurance quotes or information about Bridgeview cheapest auto insurance quotes by visiting company\’s website.

Category: Finances
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