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How To Evaluate Insurance Companies

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To evaluate an insurance company:

Step 1: Check the financial reliability of the company. You can do this through rating services such as AM Best (www.AMBest.com offsite link) and The Street (www.TheStreetRatings.com offsite link).  The higher the insurance company's rating, the better. As a practical matter, it is better to avoid companies with a rating below an A. 

Step 2. Check to find out whether the insurance company has a reputation for paying claims on a timely basis.

  • While there are no public records about payment of claims, you can check with the insurance department in your state to find out if there are a batch of complaints against the company. 
  • To locate the contact information of the Department of Insurance in the state in which you reside, see: www.naic.org offsite link

Step 3. Ask around about the company.

  • If you were introduced to the company by an employer, ask the human resources department about the company's claims reputation.
  • If you have access to an insurance broker other than the one who introduced you to the insurance company, ask about the company's reputation.
  • Ask your friends and colleagues about the company and what experience they've had with the company or what they have heard about it. Take anything you hear from individuals with a grain of salt because it is likely to be one person's experience which could be colored by factors you don't know about. 

NOTE: For information about how to choose a health insurance company, click here.


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