Previously, we touched on why you would want to look into the financial stability of your insurance company.
In case of widespread disaster, it is important to know whether or not the company you are trusting has the ability to pay its customers’ claims without becoming bankrupt.
After all, the reason you are buying your policies is to get you through unexpected difficulty. Why invest in a company with low ratings and an unstable financial situation?
If you are interested in finding out the rating of the company you use, you may want to research into more than one rating agency.
Each agency uses different methods of rating companies, often with differing results.
It is wise to compare those results by looking into several agencies, reassuring yourself that all the angles of the financial condition of your insurance provider are checked into.
Here are a few of the things these rating agencies consider:
- How long has this insurance company been in business? (Longer is ideal.)
- What is the ability of this company to pay for the claims it receives? (Obviously important to know.)
- How punctual is this company in its payment of claims? (Quickly is terrific.)
- What range of products does this company offer? (Auto? Life? Business? Group insurance?)
- How many states does the company sell coverage to? (The bigger the area covered, the better.)
- What type of investments does this company have? (Low risk is best!)
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There are many more aspects of measuring the financial integrity of an insurance company, and these agencies make it fairly simple for the average customer to investigate.
By doing just a bit of background work, you can feel more assured that your insurance provider has your back, even in the case of a wide-spread catastrophe.
Here is a list of some of the agencies that have an expertise in the rating of insurance companies:
- Moody’s is known for measuring the financial strength of a company.
- Standard and Poor’s specializes in discovering the ability of a company to pay for claims, as well as its financial integrity.
- Demotech looks at companies from the angle of what the focus is and how the execution of their business model works, rather than just their financial ratings.
- Fitch is another agency that checks out the financial stability.
All of these agencies do similar ratings from slightly different angles, so dig in as much as you feel inclined to, and have fun discovering the behind the scenes workings of your insurance provider.
If you have any questions about how to access and navigate the information these agencies provide, please feel free to give me a call.
I am always happy to answer any insurance related questions, and would love to expound on how you can be sure your provider has your back.