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Can Your Insurance Company Afford Your Claim?

Choosing an auto insurance policy is often considered to be all about the price of the policy. Sure you want the best coverage you can, and you want to be sure that you will get reimbursed for the types of accidents that are likely to happen to you, and absolutely you want to have the cheapest policy you can get, but what about choosing an auto insurance company that can actually afford to pay your claims?

Choosing an Insurance Company

One of the best ways to make sure you choose an auto insurance company that can afford your policy is to check the company’s AM Best rating before you take out the policy. AM Best is an insurance rating company that examines the financials of an insurer in order to determine how likely that insurer is to be able to pay the claims it receives. By checking the company’s balance sheets, income statements, insurance policy load and other information AM Best can get a good idea of whether or not they can handle their financial load.

Once they assess the financials they give a letter grade to each insurer. These letter grades give you an idea of just how capable AM Best things the insurer is. Generally, you want to choose an insurer with an A rating or higher. You don’t need a special sign in or a paid membership in order to access the ratings, you just need to go to the website and look up the insurance company.

Before you decide that you don’t need to worry about the rating of your insurer and instead can just pick the cheapest auto insurance rate and move on with your life, remember-an insurance company is only as good as its ability to pay your claims. If an insurer is unable to actually pay the claims of its premium paying clients than it is nothing more than just an empty promise-one that you pay for out of your own pocket.

July 30, 2010

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