How to Choose an Insurance Company
No matter what type of insurance coverage you are looking to purchase, you have to spend time not only investigating the insurance policy, but also the insurance company that you choose to issue the policy. After satisfying the mandatory rules and regulations as set forth by the Insurance Department, insurance companies have a little wiggle room when it comes to writing policies and instituting their corporate philosophy. As a consumer, you need to choose the insurance company wisely to ensure that it can adequately meet your insurance needs.
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Instructions
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Make sure the company is licensed to do business in your state. This may not seem important at first. If you purchase the insurance policy from a company not licensed it your state, problems may arise in the event of insolvency. The Department of Insurance in your state may not be able to help you if the insolvent insurance company is out of the jurisdiction.
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Check the insurance company's financial stability. Before you purchase insurance from a company, ask them about their financial rating. Ask for their A.M. Best or Moody's rating. Both A.M. Best and Moody keep track of the economic stability of financial institutions. For more information on how they rate insurance companies, visit their websites.
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Ask about the company service philosophy. Will you have a dedicated insurance agent to help you whenever you call, or will your call go into a call center and the next available agent will service you? While this may not be important to some who are content as long as their insurance coverage is priced reasonably and satisfies their insurance needs, other folks new to the insurance arena may want a dedicated insurance agent. This is something you need to find out before you buy a policy from an insurance company.
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Find out the insurance company's pricing structure. When shopping for insurance, it's wise to get quotes from several insurance companies. Some companies consistently charge higher premiums for their policies because they cater to high-end clients and offer special value-added services. Other insurance companies are very competitive because they offer the required mandatory coverages without all of the bells and whistles. It's up to you to decide if you want to pay for the frills or not.
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Choose an insurance company that is known to write the line of coverage you're looking for. In other words, don't choose a life insurance company if you're looking for automobile insurance.
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Stick with your gut. One clear indicator as to which insurance company to choose is your gut reaction. After you've investigated their financial stability, service philosophy, pricing and licensing, choose the insurance company you feel most comfortable with.
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