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How do I choose an insurance company?

Choosing an insurance company is an important decision. Because there are so many insurance companies, selecting one can be a challenge. Here are some main points to consider when making your decision:

  • Licensing - Contact the state insurance department to find out if a company holds a license to do business in your state. This is important because the state department of insurance will have little or no authority to help you with a problem if the company is unlicensed.
  • Price - Insurance is expensive. It is important to shop around. You should get at least three price quotes from companies, agents or from the internet. Your state insurance department may publish a guide that shows what insurers charge for different policies. Remember, the lowest price may not be the best option; there are other factors to consider.
  • Financial Stability - You buy insurance to protect you financially and provide peace of mind. Select a company that is likely to be financially sound for many years by using ratings from independent rating agencies. These agencies conduct analyses and provide opinions as to the financial condition of the insurance companies. You can find these rating agencies on the internet or on your state's insurance website.
  • Customer Service - When speaking with an insurance representative, you should get a detailed explanation of what you are buying, in terms that you can understand. Your questions should be answered and your claims handled fairly, efficiently and quickly. Ask family and friends for recommendations. Another resource is local body shops. Body shop managers are in a position to know which insurance companies have the smoothest claims process which affects how quickly your car will be repaired. You may also want to check a national claims database or your state insurance website to see what complaint information it has on a company.
  • Consumer's Responsibility - Remember to provide accurate information to the insurance company. If you omit or misrepresent any information your contract can be voided.
Last Modified: Sunday 21st February 2010

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