General Insurance Company Information

Get to know your insurance company and how they handle problems when they arise. Most importantly, how will the company deal with you when you file a claim? Here are some tips.

1) Visit your state's department of insurance Web site. Although you may not be familiar with it, your state, and every state, has a department of insurance. Most departments have Web sites, and many publish "consumer complaint ratios" for all of the insurance companies that sell policies in their state. This ratio tells you how many complaints an insurance company received per 1,000 claims filed.

Experts recommend that consumers use complaint ratios to screen prospective insurers.

If you've done your homework, you should already have a list of companies with the lowest premium quotes. Now jot down the companies with the lowest (or best) complaint ratios. Then, compare your two lists — the companies that rank best on both lists merit your strongest consideration.

If you can't find complaint ratios for your state examine the complaint ratios published by other states. Keep in mind that a single insurance company's practices can vary significantly from state to state — a subpar ratio in one state doesn't necessarily mean the situation is the same in your state. But watch for general trends. If an insurer is getting a lot of complaints in several other states, you probably don't want to get involved with this company.

Also note that insurance department Web sites often provide basic rate comparison surveys. These can give you a rough idea of which insurers might interest you on a financial basis without the hassle of typing in all your personal information.

2) Find out which insurers body shops recommend. One of the best ways to identify reliable insurers is to contact local body shops that you trust and ask for their recommendations. Body shop managers have a unique perspective to offer, since they regularly interact with insurance adjusters. They know which companies have the smoothest claim processes, which affects how quickly the work can be completed on a damaged vehicle. And they know which companies are pushing aftermarket parts, in lieu of genuine original equipment manufacturer (OEM) parts, to cut costs.

3) Check the J.D. Power Ratings. J.D. Power and Associates collects data from individual policyholders nationwide and rates them according to coverage options, price, claims handling, satisfaction with company representatives and the overall experience. A quick visit to the J.D. Power Consumer Center will give you a feel for how the major carriers stack up. J.D. Power also publishes an annual survey of major auto insurers — Amica and Erie have finished at the top for the last three years.

4) Consider insurers' financial strength ratings. As a final check, you can take a look at the A.M. Best and Standard & Poor's ratings. Both companies publish financial strength ratings for all insurance companies — these "measure" an insurance company's ability to pay out a claim (they have nothing to do with the way a company treats its customers).

For the general consumer, looking up these ratings is only a formality, since most of the well-known carriers are going to be a safe bet. Moreover, independent agents would be unlikely to recommend a company with dubious financial standing. Still, if you're considering a smaller, unfamiliar insurance carrier, you might consider this research time well spent. Insurance companies often provide this information on their Web sites, but if not, you can run a search at the A.M. Best and Standard & Poor's sites.

The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company's solvency), F (in liquidation) and S (suspended). In any case, you should only work with companies that have at least a B+ rating.

The Standard & Poor's ratings range from AAA (the highest) to CC. Additionally, some companies receive ratings of R (under regulatory supervision) and NR, which means "not rated." The letter grades might be modified by a plus or minus mark. Consider only those companies that have at least a BBB rating.