Auto and Home Insurance Rating Systems

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The world of insurance can be vast and confusing. Fortunately, automobile and home insurance companies don’t have the freedom to make up their own rules when it comes to the products they offer. Most states have an insurance department overseen by an appointed commissioner and that department is responsible for ensuring that all insurance companies doing business in the state are following the state mandated guidelines.

In response to the need for the public to have access to better information about the companies they are dealing with, several rating companies were formed to rate insurance companies. Most of these organizations rate companies based on their financial strength and it is important to remember that the highest rated auto and home insurance companies are not necessarily the best in terms of service or price.

Standard & Poor’s Ratings

The Standard & Poors organization rates carriers based on their financial strength, or their abilities to pay their customer claims if they were to occur. They use a ranking system that assigns insurance companies AAA, AA, A, or BBB rankings.

The highest rated auto and home insurance companies receive AAA rankings. These are the carriers who are “extremely strong” financially and are less likely to go bankrupt if a disaster caused a large number of claims. Companies with AA ratings are considered “very strong,” companies with A ratings are “strong,” and companies with BBB rankings are merely listed as “good.”

JD Power and Associates

JD Power also created its own method for rating both automobile and homeowners insurance companies. This particular organization considers more than simple financial strength. They also survey consumers to find out which companies offer the best coverage, which offer the best rates, and which have superior customer service teams. The highest rated auto and home insurance companies, according to JD Power, will have high rankings in all of these categories combined.

A.M. Best Insurance Company Ratings

A.M. Best is one of the most popular insurance company rating programs in the country and is often used by independent insurance agents when determining what carriers they want to do business with. Ratings include AAA, AA, A, BBB, BB, B, CCC, CC, R, and NR – with AAA being “extremely strong” and with ratings decreasing in value down to R, which means a company is in such bad shape that regulatory bodies have stepped in to help, or NR, which is a company that is no longer (or never has been) rated. While the highest rated auto and home insurance companies will have an AAA rating, it is perfectly acceptable to deal with AA and A rated carriers as well.

Our site aim to give you the opportunity not only to shop for the best car insurance premiums but for the best insurance companies available – in terms of rate, customer service, and financial security. You deserve the best insurance policies available – not just the cheapest!

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