How Do I Check the Ratings of Insurance Companies?

Figuring out which insurance company's products to buy can be a complicated process. A lot of insurance products seem similar, and many of the companies even seem to be identical. How do you tell the difference? Understanding how to check the ratings of insurance companies involves thinking about sources of ratings and considering how to gain access to those sources.

Fortunately for consumers, a number of independent organizations rate insurance companies. The two best-known companies that rate insurers are A.M. Best Company, a global credit rating agency offering independent opinions regarding creditworthiness, and Standard & Poor's. Both companies offer unbiased review and analysis, ranging from the quality of their products to the companies' financial health and credit rating. Additionally, J.D. Power and Associates rates insurance companies, scoring not only home, auto and health insurance companies, but also insurance agencies. Nonprofit consumer advocacy organizations also rate insurance companies--Consumer Reports offers ratings of car, home and health insurance products.

Read More: Types of Insurance Companies

Thinking about how to rate insurance companies involves establishing a strategy to access the information offered by ratings organizations. All ratings agencies have an established Web presence, but not all of the ratings information is free of charge. Doing a little bit of research and, if necessary, calling the ratings organization customer service line would help separate entirely free sources of information from ones that may have a fee associated with them. For example, A.M. Best offers some ratings information for free online, and it produces an extremely detailed bound report with ratings of all insurance companies -- however, it is only available for purchase. Most libraries buy these publications for their reference sections, though, so before you decide to buy the report, ask your local librarian about it first. Also consider calling your local Better Business Bureau or chamber of commerce to see if they maintain copies of any of these ratings reports in their libraries.