Buying insurance is buying a promise that you will be taken care of and financially compensated for at the time of your need. While cost of the policy is an important factor, there are aspects other than price that should be considered when choosing an insurance company.
1. Rating of the company Insurance companies are rated by rating agencies based on their financial strength. You want to choose a company that is financially strong to ensure they have the means to pay you when you file a claim.
2. Reputation of the company Are the current customers happy with the company? Go to your state's Department of Insurance website and check out the percentage and nature of complaints filed against the company.
3. Coverage and terms Does the company offer the coverage that you need? Are the terms, deductible, co-pay.. etc, compatible with your financial situation? Over-insuring is unnecessary and expensive since your monetary recovery is capped at the fair market value of the item insured. Under insuring, on the other hand, leads to financial distress due to inadequate coverage.
4. Who will be servicing your claims? Does the insurance company service their own claims, or do they outsource their claims handling? The difference is often reflected in the level of service and customer care.
5. Do they reward royalty? If you get into a car accident, is the company trigger happy to increase your premium, or will they reward customer royalty and implement accident forgiveness?
Buying insurance is buying a promise that you will have the financial resources you need on a rainy day. Therefore, it's important to consider all factors and select a company that has the means and desire to take care of you at the time of your need.
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