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Auto Insurance Companies

More than likely, you will have a fairly long-term relationship with your auto insurance company. Moreover, policyholders most often work with their insurers in difficult times, such as after a traumatic accident. As such, you want to choose an insurer that is reliable, trustworthy, and customer-oriented. Selecting your carrier haphazardly will lead to painful regrets down the road, so it's better to put in the time to research your potential insurers now.

How to Choose the Right Provider

Before you enter a legally binding agreement with an insurance company, you may want to do a background check. Companies frequently do background checks on employees and individuals they plan to do business with as a matter of good practice, you can do the same. Find out if a company has enough capital to be there for you if something should happen, how satisfied their customers are and whether or not they have any legal actions pending against them. This practice is not just good for businesses to protect themselves, it is good for consumers as well.

Switching auto insurance companies can sound like a frightening process, but it's actually quite simple. Drivers consider changing insurers for several different reasons: moving, the quest for better rates, the desire for better customer service or even just a personal whim could cause a driver to think about finding a new policy. But while the process is simple, there are steps consumers must follow before canceling their policies:

  • Don't cancel until you find a new carrier: You don't want to drive without auto insurance. Ever. Do not cancel your policy until you've found a new one.
  • Seek competitive quotes: Use a service such as AutoInsuranceRemedy.com, which will provide you with person-to-person access with some of the most respected insurance companies in your area. By bringing the companies to you, AutoInsuranceRemedy.com eliminates the hassle of extra research and haggling. You're introduced to the insurance companies, and you can ask however many you choose to provide you with competitive quotes that meet your personal needs. Then review the quotes before deciding which policy is best for you.
  • Realize why you're changing policies: Did you have an issue with your previous insurer? Was customer service an issue, or are you merely concerned about costs? Keep this in mind as you review quotes. If customer service is your priority, judge your prospective insurers in that regard.
  • Consider your other policies: Are you a homeowner? A prospective insurance company might give you a multiple-policy discount by combining your home and auto policies.
  • Timing isn't everything: While a month or so before your existing policy is up for renewal is a good time to consider changing insurers, there is no set time that's required. You can cancel your policy one month into your coverage or one day before it concludes. Just make sure you have your new policy ready before switching. Never consider driving without auto insurance coverage.

Our insurer report card articles are designed to summarize the strong points of America's top insurers as well as their weaknesses. Our posts will cover areas like customer satisfaction ratings, complaint histories, financial stability, and company reputation. In other words, our articles serve as scorecards of sorts for the biggest auto insurance companies in the country. By reading through our insurer report card blogs, you can save yourself the time and effort of having to dredge up this information on your own.

AAA

AAA, formerly known as the American Automobile Association, is a non-profit auto service organization and lobby group. AAA also offers life, homeowners, and auto insurance. Although AAA is headquartered in Florida, AAA insurance policies are offered by individual clubs assigned to specific states or regions. Read on for a review of the AAA car insurance company and how it compares to its competitors.

Members of AAA can qualify for substantial savings on various insurance policies. AAA offers medical, dental, home, life, travel, and car insurance. With auto policies, customers can choose from a number of coverage options ranging from liability-only to full-coverage policies. One of the most unique features of AAA insurance is the large discount policyholders receive for purchasing their auto, home, and life policies from AAA. Moreover, if an AAA policyholder has a collision with another AAA vehicle, the insurer will reduce the policyholder's deductible by $250. The distribution of AAA car insurance is unlike that of any other insurer. AAA policies are provided by the individual auto club of the policyholder's state or region. The state-specific club is a subsidiary of the AAA parent company. For instance, policyholders who live in Southern California will be covered by the Automobile Club of Southern California (ACSC).

For customer satisfaction purposes, AAA insurance is typically referred to as the Automobile Club Group (ACG). AAA has an excellent reputation for customer service, although the level of service may vary considerably from state to state. For instance, the aforementioned Automobile Club of Southern California (ACSC), an affiliate of AAA car insurance, is well-known for its high customer satisfaction ratings on overall experience, pricing, and policy offerings. AAA's main insurance company, ACG, did not perform as well on the 2008 J.D. Power and Associates survey. ACG received three out of five stars on every rating factor except policy offerings, for which it received four out of five stars.

Progressive

Progressive Auto Insurance is sold directly from Progressive and indirectly through brokerage services, which sets them apart from some of the other leading car insurance providers. They also offer quick quotes through their website and the quotes you get back include rates from their competitors so you can see how their prices stack up against competitors. One might suspect that they do this because the quoted price for their insurance will always be the best, but according to numerous consumer reports this is not the case at all. Progressive does not factor in any discounts consumers might be eligible for from their competitors and they have a disclaimer encouraging people to contact the other companies directly to find out about additional discounts. A.M. Best is the leading consumer watchdog company that ranks auto insurers based on a number of criteria including their financial solvency and their willingness and ability to pay out claims when necessary.

Progressive has received an A+ or superior rating from A.M. Best and receives similar reviews from other such services. Although some consumer feedback sites list complaints about the usability of their website, Progressive's website took top honors in for their service category in 2008 in a ranking study by Keynote, a company that ranks websites based on design and performance. In their own study, J.D. Powers, a leading consumer product rating firm, reviewed Progressive auto insurance based on consumer feedback surveys. Overall Progressive seems like a solid insurer and their website is worth going to, even if just to see how their pricing compares with other insurance companies you might be considering.

State Farm

State Farm is the nation's largest insurer, but are they really one of the best? State Farm is a well ranked and financially stable company with more than 6 billion dollars in managed assets, so consumers can feel safe that they will have they will be around and have the ability to pay out claims should any damage occur to their person or vehicle. While J.D. Powers and Associates and other official consumer product rating companies show State Farm Auto Insurance in a fairly positive light, a quick search for customer reviews reveals that not everyone has had a positive experience with State Farm. Sites that allow consumers to post their own opinions are full with complaints about having their claims handled by State Farm.

According to an unofficial poll of reader responses on the website, freeadvice.com 35% of State Farm's customers are unsatisfied. Of course, this could be true of almost any insurance company, of almost any product or service provider in general. If you are trying to choose an insurance provider, you might do well to look for some these complaints and read them yourself, but be sure to compare them to similar complaints about other companies. Disputes with customers have led to civil lawsuits including Class Action lawsuits in Florida, Michigan and California. This may be something to consider when thinking about State Farm as your insurance provider. These may be isolated incidents where there is a simple dispute of the facts, or they could be revealing of the way in which a company treats customers.

Safeco

Safeco Corporation once was the 23rd largest American national insurance company. But when the company was purchased by Liberty Mutual in 2008, it joined a much larger group of insurance companies, making it part of the 5th largest insurance company in America. Founded in Seattle, Washington in 1923 by Hawthorne K. Dent. Its original name was The General Insurance Company of America, and is still a name used by Safeco on some of its insurance products. Thirty years later the company became known as Selective Auto and Fire Insurance Company of America, or it acronym SAFECO. Then at the turn of the 21st Century, the company changed the spelling of its name to Safeco.

Liberty Mutual Group's acquisition of Safeco was a mixed blessing: Standard & Poor's lowered financial strength rating from A to A-. Liberty Mutual's loss of credibility was Safeco's gain, moving up from a BB+ rating. But the state of Safeco is still somewhat enigmatic. This is much higher than the market's and Standard & Poor's initial response which was to put Liberty on CreditWatch due to negative implications of the transaction. If these industry bulwarks can't make up their minds, it's a little beyond the scope of this article to outguess them. Unlike the low score assigned by JD Powers' review, Safeco receives an A (Excellent) customer service rating from A.M. Best Company, an independent firm that rates the financial strength and performance of insurance companies. Again in contradiction to JD Powers, Safeco has long been know for its quality of customer service and for having among the best in customer satisfaction for homeowners insurance. They should certainly gain points for their innovation from parents of teens. With a strong financial outlook in a weakened economy thanks to the acquisition of the company by giant Liberty Mutual, Safeco has inherited its parent company's higher credit rating and more. But due to conflicting and foggy information, our recommendation for you is that you consider Safeco only slightly a safe bet.

Farmers Insurance Group

Farmers Insurance Group is the third-largest insurance company in the United States. Farmers insures over ten million households in 41 states. Famers is headquartered in Los Angeles, but its parent company, Zurich Financial Services, is located in Sweden. In addition to auto insurance, Farmers also provides homeowners and life insurance as well as a number of financial services. The company began in 1928 when two men from a rural background sought to offer discounted insurance protection to farmers, who tended to have better driving records than others. Originally known as the Farmers Automobile Inter-Insurance Exchange, Farmers has been serving its policyholders for over 80 years now. To help you decide if a Farmers car insurance policy is right for you, consult our insurer report card included below.

Farmers Insurance Group usually receives the highest ratings from agencies like Moody's, A.M. Best, and Standard & Poor's that evaluate insurers' financial health. In 2008, Farmers received a financial strength rating (FSR) of A, or "excellent," from A.M. Best. Farmers also received issuer credit ratings of "A" for all of its members. A.M. Best based the ratings on Farmers leadership position in the market as well as its wise risk management strategies. Farmers' importance to it's parent company, Zurich Financial Services, also helped boost its financial ratings.

American Family

According to the National Association of Insurance Commissioners (NAIC), American Family Insurance is the tenth-largest auto insurer in the United States. In 2007, the company wrote $3,559,758 of direct, private-passenger auto insurance premiums. American Family's market share is estimated at about 2.2% of the car insurance market. Although it is not one of the largest insurers, American Family remains a contender because of its dedication to customer service and quality. Read on for an overview of American Family auto insurance and how it stacks up against the competition.

American Family Insurance is particularly well-known for the customer service provided by their agents. One of the areas in which American Family excels is the ease with which car insurance policyholders can get in touch with the company, whether through a representative or an agent. Although American Family usually performs well in auto insurance customer satisfaction surveys, it did not fare well in the 2008 J.D. Power and Associates study. Here is how American Family performed on various measures of policyholder satisfaction:

  • Overall experience: 3/5
  • Policy offerings: 3/5
  • Pricing: 2/5
  • Billing and payment: 3/5
  • Contacting the insurer: 4/5

 

Allstate

Allstate is right behind State Farm as the nation's second largest auto insurance provider. Allstate was originated in 1931 by the Sears Roebuck and remained a part of the company for fifty years. They are their own company now. So, how do they rate as an automobile insurance company? What do their own customers have to say about Allstate as an insurance provider?

Allstate auto insurance is rated by AM Best, the leading watchdog on the insurance industry, A+ or Superior. However, J.D. Power and Associates also provides reports on insurance providers, among other consumer products and services. J.D. Powers 2008 National Insurance Study, rates Allstate as simply average, with their pricing being the main drag on their overall score. The study rates insurance companies on a scale of 1 to 5 in five different categories, with 1 being poor and 5 being Among the Best. Their score is summarized as follows:

  • Overall Experience: 3 out of 5.
  • Policy Offerings: 4 out of 5.
  • Pricing: 2 out of 5.
  • Billing and Payment: 4 out of 5.
  • Contacting Insurer: 3 out of 5

 

In comparison to others in the study, this is an average rating from J.D. Powers and Associates. The low score of 2 in the pricing category is listed by the study as being the rest, meaning that Allstate is not performing as well as the average and above companies in this category. Some of their higher scores bring their overall score up to the Average rating. In spite of the J.D. Powers rating, they are the second largest provider in the nation and have more than 47 billion dollars in managed assets, making them a healthy company that will be sticking around and can certainly afford to pay on any claims that their customers may file.

Nationwide

Nationwide auto insurance is a division of Columbus, Ohio-based Nationwide Mutual Insurance Company. Established in 1925, and went public in 1997. The company holds more than $157 billion in assets. They have a catchy tune and logo that you've probably heard, promising that "Nationwide is on your side", but is that true or just a gimmick?

Given the current depressed state of the economy, it is no surprise that Nationwide insurance is suffering financially just like almost every other business out there. Recently at the end of 2009 Standard & Poor's - the national credit rating agency for businesses - reduced Nationwide's credit rating from AAA- to A+ in order to bring it in line with its parent company, however S&P's outlook for the company remains stable, so their financial outlook and ability to pay claims is strong, but do they pay?

Reviews of Nationwide's claims service are mixed, but leaning toward the negative if you are not a Nationwide customer and are involved in an accident with someone who is. Getting Nationwide to pay up for a claim that their client is at fault for seems to be a monumental task unto itself. In addition, the claims adjusters seem to be difficult to get a hold of at the most inopportune time, requiring that contact be initiated by the customer and much legwork that they should be handling be handled by the client instead.

AIG

For their car insurance coverage, AIG tends to lean toward the higher-end, more wealthy clientele based on their name and overall standing in the insurance industry. Their rates tend to be higher than those offered by the other, larger insurance companies such as GEICO, Progressive and Allstate.

AIG Insurance receives generally reviews for their claims service, and poor reviews for their customer service since the firm does not have a wide array of local agents around the country in order to to provide a level of personal interaction that many may be used to from their insurance company. Most of AIG's auto insurance interactions will happen via the telephone and Internet which leaves many feeling cold and left out.