Property Insurance Company Shopping? 4 Strategies For Choosing

When choosing a property insurance company, whether you need homeowners or business insurance, you want a solid company that offers competitive premium prices and has excellent customer service. Consider the following four strategies as you select the right property insurance company for you.

1. Highest Rated Companies

For many, the certainty that an insurance company has the financial strength to pay claims when you file them is of utmost importance. Fortunately, insurance companies are rated according to their financial stability, and these ratings are available to anyone.

There are two primary rating agencies, Standard & Poor’s and A.M. Best, with A.M. Best being the best-known in this area. A.M. Best rates insurance companies from “Superior” to “Suspended.” Companies are assigned a letter grade corresponding to those descriptive words.

“Superior” companies are rated A++ and A+; “Excellent” companies are rated A and A-; and so on down to companies “In Liquidation,” rated F or “Suspended,” rated S.

No matter what aspect of a property insurance company is important to you - price, service, rating - be sure to choose a company that is financially sound. Little else will matter if the company can’t pay your claim.

2. Best Customer Service

For others, service after a claim is filed is the top priority. Survey companies such as J.D. Powers rate homeowners insurance companies for customer service.

Your state Department of Insurance also will be a source of unbiased information. Each state maintains a database of complaints against insurance companies licensed to do business in that particular state. Along with the complaint, the database will show if the complaint was resolved. These databases also track complaints on individual agents.

Don’t neglect personal recommendations. Ask homeowners or business owners in your area which company they use and what their experience has been.

3. Lowest Price

The cost of insurance is an important consideration but should not be your only consideration. An unsound company or a company with poor customer service will offset the benefit of lower premiums.

You don’t necessarily want the lowest price possible, but the lowest price for the coverage you need from a company you want.

Begin this process with a clear understanding of what coverage you need for your home or business. Compare premium prices only on companies offering you the same coverage and the same service. Insurance quotes are available both online and from individual agents and cost nothing.

Once you have insurance quotes, it is legitimate to look for cost verses benefit tradeoffs. For example, you may choose to go with a company rated “Excellent” as opposed to “Superior” because the premium is less. Or you may choose a company with limited customer service hours because that benefit is worth less to you than a lower premium.

4. Making Yourself an Attractive Customer

Before selecting your property insurance company, do what you can to make yourself a customer they want. You can do this by having your property in good shape to be insured and having your finances in the best shape.

Regarding your property, your premium will vary with the age, condition and location of the structure. You can improve your chances of a lower premium by making repairs and improvements prior to its inspection by the property insurance company.

Additionally, your ability to pay and your credit history will make you more or less attractive to a company. The higher your credit score, the lower a premium that can be offered.


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