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Selecting the Best Car Insurance Provider

A car accident is a frightening experience, but it's even scarier if you don't have a good insurance company to provide comfort, guidance, and financial relief. Choosing the right carrier can really pay off in the long run.

Car insurance, a requirement in all states, protects you and others from the risks involved with owning, driving and riding in an automobile. It covers a variety of circumstances like traffic accidents, theft, fire, vandalism and natural disasters. It's designed to cushion you against financial loss, when your bumpers and airbags may not be cushion enough.

Selecting the right company goes way beyond catchy marketing slogans like, "You�re in good hands with Allstate," "Nationwide is on your side," or "Like a good neighbor, State Farm is there." Will their neighborly hands really be on your side when it's time to collect?

When circumstances get difficult, the rubber meets the road. You need your insurance company not only to treat you right when things are going well, but to pay on time, and in full, when you file a claim. Here are some other important requirements to look for in an insurance provider:

  • Good track record - The company that you choose should have a solid track record. Your car is, perhaps, your second largest asset. You wouldn't think of buying it without a test drive. Make sure your provider has been around the block as well.
  • Quality agents - The agent, the liaison between you and the company, should be ethical, professional and courteous. He's the person you'll be calling when the going gets tough.
  • Excellent service - The insurance company should have efficient processes in place to handle issues like policy servicing, providing customized solutions to individuals, and settling claims.
  • Sound financial management - Financial stability affects the monetary returns an insurance provider generates. It should have good underwriting practices, low management and administration expenses, and sound fund management-all of which have an impact on premiums and the company's ability to pay claims.
  • Price - You need to work with an insurance company with affordable rates. However, the least expensive company may not be the best option because they may provide the least insurance. Your safest bet is to choose a company that offers coverage that meets your needs for the best value.

Making the Grade

How do you really know whether an insurance company is reliable and capable of paying claims? You can easily check their rating with independent resources like A.M. Best Company and Standard & Poor's. They measure an insurance company's ability to pay out a claim.

The A.M. Best rating is reflected 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). It is better to work with those insurance companies that have at least a B+ rating.

The ratings for Standard & Poor's range from AAA (the highest) to CC. There's also a rating of R for companies under regulatory supervision, and NR for those "not rated." Additionally, the letter grades might also show a plus or minus mark. Pay attention to those insurance companies that possess at least a BBB rating.

To check the customer service record of a car insurance company, contact your state's Department of Insurance. They publish "consumer complaint ratios" for all the carriers that sell policies in their state. The ratio indicates how many complaints a company received for each 1,000 claims filed.

In addition, check the insurance department's website for basic rate comparison surveys. These valuable tools can give you a rough idea of which insurance provider might interest you without the hassle of using an online quote site. Also, you can check with the Better Business Bureau to see if the provider has complaints, and how they were addressed.

Another way to do your own research is to check with your local body shops to see which insurance providers they recommend. They've dealt with auto adjusters after accidents, and they know which companies have responded most favorably to claims, and which didn't. These are excellent sources to cultivate.

Finally, get suggestions from co-workers, friends and family members. Ask them which auto insurance providers they use, and have them rate the company's level of customer service. If they've had negative experiences, you can bet they'll be happy to share them.

Relying on Agents

If you need additional help choosing an insurance company, an agent can help you find one. You have a choice between a "captive" agent who represents one company, and an independent agent who sells insurance for several insurance companies.

"Don't rule out direct providers," advises Dennis Howard, director of the Insurance Consumer Advocate Network (I-CAN). "My personal preference is to have an agent, preferably an independent one, write your policy for you. An independent agent would become aware of less advantageous conditions with one company, and help you move to another. I encourage consumers to develop a relationship with an agent." He adds, "Take the time to talk with an agent or a broker, as well as do your online research."

The bottom line is that you won't find out how good your insurance company is until you have an accident. Do the necessary homework to ensure you have the right insurer in your corner before you file a claim. It will make your frightening experience a little less scary.

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Purchasing Car Rental Insurance

If you are like most visitors to auto rental counters, you have already been faced with the dilemma of whether or not to purchase some form of auto rental insurance when you rent a car. Often, people purchase the expensive rental insurance instead of cheap one, just to be safe, when they actually are already covered under their own car insurance policy or as a perk offered by their credit card company when they pay for the rental with a credit card.

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Car Insurance Discounts

W.C. Fields once said, Never give a sucker an even break. He may as well have been addressing the purchasing of auto insurance, since insurance companies show a unique talent for sniffing out suckers. And they're not bending over backwards to give anyone a break. The higher your premium, the more money your insurance company rakes in. It's up to you, as an educated consumer, to seek out the myriad insurance discounts that are out there waiting for you. Read our car insurance tips to learn how you can get discounts on auto insurance.

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