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Shopping for an Insurance ? |
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While it's usually the first thing you look at, price is not the only factor to consider when you're shopping for insurance. You also have to think about what you're paying for. Cheap coverage from a company that offers lousy services, takes forever to settle its claims, or goes bankrupt is worse than no coverage at all. Beyond price, you should look at the financial strength of a company, its reputation for service, and the specific coverage's, discounts and other benefits it may offer. As the name suggests, the financial strength rating indicates how well prepared an insurance company is to pay out claims to its policyholders. While you want your auto or home insurer to have a good rating, it's vital that your life insurer has one, since the company may not have to pay out on your policy for a long time. You'll want to make sure that the company will still be around when the time comes. There are five major ratings services in the U.S. that list financial-strength or claims-paying ability ratings. All but A.M. Best and Weiss tell consumers the claims-paying ability rating of a company for free. All but Weiss are paid by the insurance companies themselves to publish their findings. It's important to know about this arrangement because it means that companies can request to have their ratings withdrawn. Sometimes companies make such a request when their ratings begin to slip. In addition to the letter ratings, most services publish full analyses of an insurance company's health. If you want to know the claims-paying ability rating of a particular insurance company, try asking an agent or a company representative. If possible, find out how the company stacks up with all of the ratings services. If you have trouble getting the information from the company itself, you may want to think twice about buying from them. You can also get the information right from the horse's mouth. Some services even offer listings online. Below is information about the way each company disseminates its ratings, along with information on how to contact them.
Service At this point, it's a good idea to decide how you want to buy your insurance. Companies distribute their products a few different ways. The majority work through independent agents or brokers, who often represent more than one company at a time and will try to get you the best deal out of all the companies they represent. Other insurers, such as Allstate and State Farm, work through exclusive, or captive, agents, who represent only that company. While a captive agent may know one company's products inside and out, you won't know if you're getting the best deal that's out there. Still other insurers sell their products directly to consumers via telephone, mail or the Internet. Because there's lower overhead involved, direct insurers can usually offer their products at a discount. Still, many people like dealing with an agent or broker because they like to feel that someone is, or ought to be, on their side. Once you've determined that a company is financially sound, you'll want to consider the kind of service you're going to get. If you're buying through an agent or broker, you'll want to make sure that he or she has a good grasp of the product being sold, especially when it comes to life insurance. You also want to make sure that your claims are going to be handled quickly and with a minimum of fuss. In general, customer service is such a personal matter that it's difficult to come up with a reliable indicator. You might want to start out by asking your family and friends about their experiences with an insurance company. Keep in mind, though, that one lousy agent or adjuster may not fairly represent an entire company. Some states publish consumer complaint ratios for specific lines of insurance, comparing the number of policies a company has to the number of complaints filed against it in any one year. Unfortunately, the availability and reliability of these guides varies. Some insurance departments use only complaints that turned out to be valid to calculate their ratios, and some count all of them. You should also call your state insurance department's consumer services division and ask if any disciplinary actions have been taken against your prospective agent, broker or insurance company. You may want to call an insurance company's customer service line and ask what the average turnaround time is for processing and paying a claim. If the company has these statistics, they should be happy to share them with you. If you have trouble getting an answer, that also might be a red flag. Find out how your company decides to non-renew or cancel policies. Usually, it's spelled out in the actual policy, so make sure that you've read that bit of fine print before you sign. Special Deals If you're are a member of the AARP, the AAA, the military, a union, a professional group or similar organization, you may be able to get a better deal on your insurance. Often, insurance companies will enter into joint ventures with organizations, banks and credit unions. Regardless of the deal that's offered you, it's still a good idea to shop around; you may be able to find comparable coverage and service elsewhere for a lower price. Ultimately, your final decision may swing on the way an agent treats you or the fun games you'll find at a company's web site. Just make sure that's not the only reason you choose one company over another.
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