Is Your Car Insurance Company Rated?

Did you know that there are several national rating institutions that exist to provide car insurance companies with ratings? Ratings are important because they help predict whether or not a car insurance company will be able to pay for claims that may be submitted by the policy holders. Can you imagine the nightmare of getting into a car accident and submitting a claim- only to find out your car insurance provider is unable to cover the expenses? Can this really happen? They also answer questions regarding why you can have the same level of coverage with two different companies and have two different car insurance premiums.

There have actually been car insurance companies that have gone bankrupt or failed because of the inability to pay for claims submitted by their insured, and companies who have not been competitive enough within the car insurance industry to maintain operational in the marketplace.

When you are shopping for car insurance or looking for better car insurance quotes, you should begin your search with the financial strength ratings of car insurance companies.

Financial Strength Ratings for Car Insurance Companies

Five of the most popular and reliable sources for financial strength ratings of car insurance companies include:

Standard & Poor's Ratings (http://www.standardandpoors.com) Standard & Poor's is one of the world's preeminent providers of credit ratings
Fitch Ratings (http://www.fitchratings.com). Fitch Ratings provides ratings and research on insurance and insurance-related companies on a global basis.
A.M Best (http://www.ambest.com) A.M Best offers an independent opinion of a company's financial strength, operating performance, and ability to meet its financial obligations to policyholders over the next 12 to 36 months. They place each rated company into categories, from excellent down to poor.
J.D Power and Associates (http://www.jdpower.com) J.D Power and Associates is the largest, most comprehensive historical customer satisfaction databases in existence.
Weiss Ratings (http://www.weissratings.com) Weiss ratings provides free lists of the strongest and weakest financial services companies.

Ratings for a car insurance company's financial strength analyze a wide variety of risks that could affect an insurance company's long-term performance and ability to pay on claims. Each rating organization has it's own system for providing ratings, and while it has been suggested that they are not completely bias-free, you can check various ratings to get a good understanding of a particular car insurance company based on their ratings.

When you are shopping for car insurance rates, you should always take into consideration the financial health of the insurance company. This is most often overlooked by individuals who are looking to save money on their insurance needs, and most people just select the lowest quoted insurance that they can find.

in addition to checking the financial health ratings provided by Standard & Poor's Ratings and Fitch Ratings, you should also request a copy of the insurance company's quarterly report. The quarterly reports are publicly accessible and provide information on the company's past performance. While the history of a company does not dictate the future success of a company, the past performance of a company is a valuable insight into the future of the company.