Regulators Recommend Getting Top-Rated Auto Insurance Provider

LOS ANGELES, Nov. 23, 2010 /PRNewswire/ -- Though consumers may be so focused on finding the cheapest price for coverage that they end up overlooking the need to fully vet an auto insurance provider, taking a moment to check on the financial status of a carrier could help them dodge a headache down the road. Most state regulators espouse the importance of going with a financially sound company and advise drivers to take the time to research this factor. OnlineAutoInsurance.com also stresses the importance of getting coverage from only the best rated car insurance companies.

Checking on an insurer's rating can help consumers get a better idea of whether a company is at serious risk of being unable to make good on its debts, which can certainly be a matter of consequence to a person who is owed claim money. Positive ratings, though, do not guarantee that a provider will not go insolvent; the ratings are simply independent agencies' educated opinions on companies' financial viability. Nevertheless, they remain the best indicator.

Insurance company insolvencies are relatively rare. According to the Insurance Information Institute (III), rating agency A.M. Best reported that in 2009 a total of four auto liability insurers became insolvent. But for the drivers who held policies with those four insurers, the process of repayment may have been a bumpy one.

When an insurer falters, it receives government assistance in order to get back on the right track. In states like Washington, this may entail the suspension of its ability to issue new policies while an extensive rehabilitation process takes place in which regulators take over the executive roles within the company. If the rehabilitation process fails, the state issues an order of liquidation, and policyholders with claims either get paid on a prioritized schedule or are referred to state guaranty associations.

Source: http://www.insurance.wa.gov/consumers/tips/financiallytroubled.shtml

To research financial standing in order to avoid being left holding a policy from an insolvent company, consumers can go directly to the websites of independent agencies like A.M. Best and search for a particular insurer. It is important that prospective policyholders get this information directly from the agency rather than from the coverage providers themselves.

Readers wanting to learn more about the best rated companies can go to http://www.onlineautoinsurance.com/companies/ratings where visitors will also be able to get free quotes on coverage from a variety of reputable carriers.

SOURCE Online Auto Insurance, LLC