Not all insurance companies are the same and these differences may affect your decision when purchasing an insurance policy from them. Key differentiators for insurance companies include credit rating and customer service. For you, this translates into two questions: will the insurance company be able to compensate you in the event of loss and how easy do they make it for you to collect on your policy?
The major credit rating agencies (Standard and Poors, Moody’s, Fitch Ratings and AM Best) can all help you assess the credit rating of a specific insurance provider. Essentially, the better the rating, the more likely it is that an insurance company will have the resources to compensate when you file a claim. Keep in mind that while the “one-off” claims are relatively straightforward, insurance company resources are put to the test when there is an event that affects a large population (such as a storm or natural disaster).
Customer service rating agencies such as JD Power and Associated and Consumer Reports can help you assess whether the level of customer service offered by insurance providers. Additionally, you can perform some independent research using online search engines to find consumer reviews.
The factors should be considered together. By focusing on one and not the other, you run the risk of buying a policy from a company that has the means to pay your claim, but makes it incredibly difficult for you to collect or from a company that is wonderful to work with, but doesn’t have the resources to pay your claim.
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