Choosing an Insurance Company: 10 Considerations to make

Know the number of insurance companies in the US? According to data collected in 2017, the number of insurers stands at 5,954.

It is unlikely that you’ll want to consider all these options when shopping for insurance – who has the time for that? But still, those that are within your reach can be quite a number; a substantial one at that.

Which amongst them is the best for you? Which criteria can use to determine this? Or should you just pick whatever comes your way first and hope everything goes fine?

There is a lot you can ask yourself – and end up even more confused. Thankfully, you have to wonder no more.

A few steps down and you’ll have a starting point as far as choosing an insurance company is concerned. Go ahead and grab yourself this 10-point checklist.

1. The Company’s financials

The last thing you want to do is settle with a company with shaky financials. Remember you are trying to secure your future, and you want a company that is certain of paying up in case of a loss.

A company in the red will not be in a position to do this.

But, of course, reading through a company’s books is not something you might fancy. And, chances are you won’t understand much even if you were remotely interested. So what do you do?

Enlist the services of rating agencies. These agencies offer simple ways of telling just how strong financially an insurance company is using some pre-set criteria. All you have to do is log on to the websites of the agencies and search for your company of choice.

Some notable ones are:-

A few points to note

  • Always consider more than one agency rating before concluding.
  • Don’t take the insurance company’s word on ratings. Make a point of checking on your own.
  • All the above agencies use their own criteria to rate companies. A higher position from one agency may mean something lower for another. Vulnerable and secure are the classifications you should keep an eye on.

2. Rates

Just like in buying anything else, shopping around when choosing an insurance company can pay off hugely.

By looking around, you not only end up with affordable premiums. You get to, also, land coverage that ticks all the boxes for what you want. Get quotes from all-around – online, insurance agents and even walk to the insurance companies’ premises in person.

That said, you should be careful not to forego important covers chasing bargains.

3. Any discounts?

Premiums can take a toll on your financial position. But they are necessary for your peace of mind.

So, a few bucks off the bill can go a long way. And getting these discounts shouldn’t be a problem if you look around. You can get a host of these price reliefs depending on the company you choose and how you transact with the said company.

For instance, most insurance companies reward new customers with a percentage off of the first few months’ premiums. Additionally, you can get some more discounts if you take more than one policy with the same company.

Just ask about it and see what the company has to offer on this frontier.

4. What are those around you saying?

As a social being, you have a rich pool of insurance buyers in various companies. Make use of it.

Talk to your friends, family, and co-workers and see what options they are using. What do they find appealing? What do they detest? How long have they been with the company? What made them terminate business with their previous insurer?

The advantage of getting information this way is the unfiltered nature of the reviews. Any positive or negative ones are bound to be more honest as they are coming from someone without any vested interest.

5. The legality of the company

It is always a good idea to pick a company that is legally recognized – no brainer.

Companies with accreditation tend to behave when it comes to laid down rules and regulations. You can sleep easy knowing that you’ll have the backing of authorities if anything goes wrong.

Also, the fact that a certain company is licensed to operate in another state doesn’t automatically give it the same rights in your state. Check to ascertain it. The state insurance department is your credible source of all the accredited insurance companies. Make use of it.

6. Location

Consider buying insurance from a company with a local presence.

Sure, it is much more convenient grabbing stuff online. But you might want to reconsider this stance when it comes to insurance. Choosing an easily accessible insurance company can prove beneficial when the worst of it comes.

7. Customer service

Just like any other company you wish to transact with, right? You surely don’t want a company that completely disregards the customers’ complaints.

Take a look at how they quick (or slow) they respond to queries and how they address customers’ problems. Put yourself in the shoes of their customers and see how you like it.

8. Your insurance needs

You have no business choosing an insurance company with little to no coverage of your risks. Consider your needs and go looking for an insurer that has a cover for you.

A general policy may be better than nothing. But it can prove a bad idea when your worst specific uncertainties come up.

9. Transparency

Some unscrupulous companies may flash a few spicy parts of the policy to win you over.  Watch out for this. If anything, walk away as soon as you notice this.

A credible insurer should lay out everything like it in the policy document for you to make a choice. Additionally, always make a point of going through all the terms and conditions of your policy so that you don’t end up disappointed down the road.

10. Claims handling

Try to get some information as far as claims are concerned. Is it the kind of company that sets customers in endless circles when it comes to paying claims? Then you might want to skip it.

A company that is upfront about claims – even in the case when they’re not paying – is far much better.

Ready to jump in?

Choosing an insurance company can be overwhelming – there are so many options to consider. But you no longer have to fret it. The points above are great ice breakers. Use them to make easy your whole insurance-buying process.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.