When something bad happens, insurance companies should be places you can rely on. Unfortunately, insurance companies are not always able to pay when an insurance claim is made. Consequently, you might be left with hefty medical, automobile, or home repair bills.
To ensure that your insurance company is able to pay out your insurance claims, it is imperative to research companies beforehand. Choosing a safe insurance company that can ensure you peace of mind in the event of a personal or natural disaster is very simple. The first thing you must do is complete some basic research about the insurance company’s financial position.
If you’re concerned about an insurance company paying you promptly and in full, try working with a safe insurance company that has established themselves over a substantial amount of time. A company that has been in the market for many years is likely to continue that trend into the next five to ten years.
The easiest way to double check an insurance company’s longevity is by checking their financial ratings. Reviewing a company’s financial rating is easy, as each state has a specific method of providing ratings. Your state’s department of insurance website will include ratings for all insurance companies. Ratings are provided in the form of a letter grade, ranging from A++ to F. Some insurance companies might be rated “S,” if the company is no longer financially rated. However, any company with a rating above a B is typically considered satisfactory and likely to continue business – a strong indicator you’ll be working with a safe insurance company.
Another method to check an insurance company’s lifespan is by watching stock trends. Locate a website that tracks insurance company’s stock trends. On the one hand, if a company shows a general increase in value over a longer period of time (typically six months to six years), this indicates that the company has a strong financial standing. On the other hand, if a company shows a general decrease in value, the decrease is likely indicative of a negative financial future.
A third way to identify the longevity of an insurance company is by staying on top of the insurance industry. Keeping up with current news and trends in the insurance industry will help you to identify which companies you would like to work with and which companies you should avoid. Once you understand the basic climate of the insurance industry, conduct basic internet searches of companies you are interested in. Search the company name along with phrases that indicate negative reputations like “failure to pay claims” or “bad financial standing.”
History of Paying Claims
In addition to researching a company’s longevity, you can determine a safe insurance company’s financial standing by checking how many claims they actually pay out. State agency websites are the best places to find out if an insurance company is likely to pay out claims, or has a history of not paying claims. The state agency website will also include a list of customer complaints. Sift through the complaints for any indicator of the insurance not paying a claim. Doing so will help you learn from the mistakes of others; if a company didn’t pay a claim made by another customer, truly question if they’re likely to pay yours.
Know Your Rights
Every individual who is covered by an insurance policy has specific insurance rights. Such rights are detailed by your state’s department of insurance. You can contact your state’s department of insurance to find out your rights under the state’s guarantee fund. This fund sets aside money to cover insurance claims for companies that can no longer pay off claims. Think of the guarantee fund as insurance for insurance companies. A safe insurance company will never need to utilize the guarantee fund, but to be sure, phone your state’s department of insurance to see how much money you are entitled to in the chance that your insurance policy doesn’t cover your claim.
Question Your Company
Since you are allowed to switch insurance providers at your liking, you should also know when the correct time is to change your insurance provider. If you are unhappy with your current provider, or question whether or not they are a safe insurance company, use your best judgment to determine whether you should go to the hassle of switching providers. Before leaving your current company, ask yourself some of the following questions to gauge whether or not you truly want to leave:
- Have you ever filed a claim? Did the insurance company pay that claim? Did payment arrive quickly and in full?
- Are there other insurance companies with better rates? Is your current policy comparable with another leading company’s policy rates?
- Do you feel safe with your insurance company? Are you doing business with a safe insurance company?