How Strong is Your Auto Insurance Company Financially

When you are shopping around for auto insurance quotes, one important thing to keep in mind is the financial strength of your auto insurance company. How would you like to pay your premiums diligently, like a good auto insurance customer, then get in an accident only to find out that your company wasn't in a financial position to pay you what you're owed? This is especially important in the case of natural disasters, which can cause a tremendous amount of damage, and result in a lot of claims at the same time. If your auto insurance company isn't in good financial health, they may not be able to bear this additional strain. Therefore, it's best to check out the auto insurance carriers financial health before you buy.

So, how do you do this? Well, there are two easy to find resources at your disposal:

1. A.M. Best is a company that publishes insurance companies financial strength ratings. The purpose of these ratings it to let the consumer know the insurance companies ability to actually pay a claim. A.M. Best's ratings range from A++, which is the best, to D. Ratings of E indicate regulatory action, F indicate that the company is in liquidation, and S means the company is suspended. Only choose companies with B+ ratings and above.
2. Another company that provides ratings on insurance companies financial health is Standard & Poor's. Their ratings go from a top rating of AAA down to the bottom which is CC. A rating of R indicates that the company is under regulatory supervision, and NR means that the company is not rated. You should only look at companies with a BBB rating or above.

You may be able to find this information on companies websites. If they are in good financial shape you would think they would want to advertise it. If not, you can also search at the A.M. Best or the Standard & Poor's website.

As always, do your homework and shop around for auto insurance quotes before you buy. Be sure to check out the companies financial strength, and remember that this rating has nothing to do with customer service, simply the companies financial strength.