If you watch TV or use the Internet on a regular basis you are more than likely aware of consumer credit scores.
These are systematically formulated numbers that indicate a consumer's reliability based on a variety of facts about their past.
They can determine if someone gets a loan, job, or even a decent rate on insurance coverage.
Interestingly enough, auto insurance company ratings can be used in the same fashion by a consumer hoping to identify a good company to give them coverage.
Just like consumer credit ratings, insurance ratings are derived from a large set of factors that include financial stability and strength along with past performance data.
This is all taken into consideration and then converted into a very clear-cut range of "grades" such as A+.
A consumer can use auto insurance company ratings during their decision making process.
They should not base their choice strictly on a company having a lower or higher grade, however, but should actually investigate the reason for the company having the current rating that it does.
For example, when looking at an array of quotes, the consumer might see that one has an A+ rating and one a B++ rating.
If they didn't investigate each rating in greater detail they might miss the fact that the company with the A+ rating actually declined from the A++ rating due to financial issues while the B++ company has actually improved dramatically from a C+ rating only a year earlier.
Obviously, auto insurance company ratings can become confusing when they are relied upon too heavily, but as just illustrated above, they can really indicate if a company is performing competitively and if they are going to be in existence for a lengthy period of time.
Just like a consumer credit score, they also indicate the fiscal responsibility that the company is demonstrating to its clients.
This is because the ratings usually come from an assessment of the insurance company's investment plans and how it pays out on claims.
If the company is showing enormous amounts of income with low payments against claims this could be easily seen as a "red flag" warning to a consumer that the company may have a bad history with paying their customers.
Can standard auto insurance company ratings indicate if a company shows reluctance to make necessary payments? Not usually, but if the consumer visits a few insurance ratings sites that are feedback-driven rather than filled with data about financial details, they are likely to find all sorts of information from current and past customers.
These sorts of consumer sites are another fantastic tool to use when seeking out an insurance plan of any kind.
These are systematically formulated numbers that indicate a consumer's reliability based on a variety of facts about their past.
They can determine if someone gets a loan, job, or even a decent rate on insurance coverage.
Interestingly enough, auto insurance company ratings can be used in the same fashion by a consumer hoping to identify a good company to give them coverage.
Just like consumer credit ratings, insurance ratings are derived from a large set of factors that include financial stability and strength along with past performance data.
This is all taken into consideration and then converted into a very clear-cut range of "grades" such as A+.
A consumer can use auto insurance company ratings during their decision making process.
They should not base their choice strictly on a company having a lower or higher grade, however, but should actually investigate the reason for the company having the current rating that it does.
For example, when looking at an array of quotes, the consumer might see that one has an A+ rating and one a B++ rating.
If they didn't investigate each rating in greater detail they might miss the fact that the company with the A+ rating actually declined from the A++ rating due to financial issues while the B++ company has actually improved dramatically from a C+ rating only a year earlier.
Obviously, auto insurance company ratings can become confusing when they are relied upon too heavily, but as just illustrated above, they can really indicate if a company is performing competitively and if they are going to be in existence for a lengthy period of time.
Just like a consumer credit score, they also indicate the fiscal responsibility that the company is demonstrating to its clients.
This is because the ratings usually come from an assessment of the insurance company's investment plans and how it pays out on claims.
If the company is showing enormous amounts of income with low payments against claims this could be easily seen as a "red flag" warning to a consumer that the company may have a bad history with paying their customers.
Can standard auto insurance company ratings indicate if a company shows reluctance to make necessary payments? Not usually, but if the consumer visits a few insurance ratings sites that are feedback-driven rather than filled with data about financial details, they are likely to find all sorts of information from current and past customers.
These sorts of consumer sites are another fantastic tool to use when seeking out an insurance plan of any kind.