How to Tell If Your Auto Insurance Company is Reputable or Not

How do you know if an auto insurance company is reputable? The National Association of Insurance Commissioners (NAIC) is a good place to start if you're wondering if your auto insurance company is reputable or not. You can also use the financial rankings from A.M. Best and the customer satisfaction from J.D. Power to tell if your car insurance company is reputable or not.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Nov 12, 2020

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Americans have hundreds of choices when it comes to car insurance. But how do you know if a car insurance company is reputable or not? How can you ensure your new car insurance isn’t a scam? Today, we’re explaining how you can determine if your car insurance company is reputable – or if it’s a scam.

Check the National Association of Insurance Commissioners

In order to sell car insurance, insurance companies and insurance agents need to meet certain licensing and regulatory requirements.

It can be hard to tell if an insurance agent is legitimate. The website might look trustworthy. The agent might appear to be running a legitimate business.

Fortunately, you can easily verify if an insurance company or insurance agent is legitimate by checking with the National Association of Insurance Commissioners (NAIC). The NAIC has a map that can easily direct you to the insurance regulator in your state.

Typically, your state insurance regulator has multiple ways to ensure your insurance agent or company is legitimate:

  • You can contact your state insurance regulator by phone or email to verify you are dealing with a legitimate, state-licensed insurer
  • You can view a directory of agents and brokers online to find licensed professionals serving your area
  • You can check the licensing status of an insurer based on their license number or name

Using all of these methods, you can verify that the insurance company you’re dealing with is legitimate and licensed in your state. Using your state regulator’s website also lets you easily verify that the license is up to date.

Ultimately, your state regulator’s website should be the first resource you check when verifying an insurer’s information online. If you’re verifying an insurance company in California, for example, then you can check the California Department of Insurance official website at www.insurance.ca.gov. If you’re checking an insurance company in Texas, you can visit the Texas Department of Insurance at TDI.texas.gov.

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Check your Insurance Company’s Financial Status Using AM Best

Some insurance companies are legally licensed, but they’re in poor financial standing. An insurance company might appear to be legitimate, for example, and is licensed by the state – but its poor business practices leave customers at risk.

An organization called AM Best is dedicated to tracking the financial status of insurance companies. AM Best is a global credit rating agency focused on the insurance industry.

Visit www.AMBest.com. From the homepage, you can view ratings for insurance companies around the world. You can search for a company by their name or their region.

If you’re buying any type of insurance, then you can’t risk working with a company in poor financial health. These companies might not be able to pay out your claim if certain situations arise. Consider checking the AM Best rating if you’re hesitant about a particular insurance company.

Check the J.D. Power and Associates Rating

J.D. Power and Associates is a ratings organization dedicated to the automotive world. The organization is best known for its vehicle rankings, although it also releases comprehensive insurance company rankings on an annual basis.

The J.D. Power and Associates ratings are a big deal for car insurance companies across the United States. J.D. Power and Associates will collect reviews from customers, explore the claims process of various insurance companies, and then deliver a final rating based on the overall quality of the company.

Generally, the biggest insurance companies in the United States are all very well-reviewed on J.D. Power and Associates ratings. However, the rankings can change on a yearly basis.

You can view the J.D. Power and Associates ratings for the car insurance industry here: https://www.jdpower.com/business/ratings/industry/insurance

The organization has a number of different ranking systems. Insurance company ratings are broken down by region and state, with different ratings for insurance companies in different parts of the country. There’s a “California” rating grouping, for example, as well as a New England, New York, and Northwest grouping. Choose your region, then explore which companies have the best service based on your budget and lifestyle.

In last year’s rankings for California, car insurance company Ameriprise took home the top ranking in terms of overall satisfaction, followed by USAA, Wawanesa, Auto Club of Southern California Insurance Group, and The Hartford.

In New England, where insurance companies operate on slightly different rules and regulations, there was a different set of rankings. The best car insurance company overall was Amica Mutual, followed by USAA, State Farm, Allstate, GEICO, Progressive, and Nationwide.

Compare Insurance Quotes Online Today to Find the Best Car Insurance from Legitimate Providers

Today, websites like us make it easy to compare car insurance quotes online in minutes. All car insurance quotes featured on our website are from legitimate, licensed providers with a strong history of customer service. However, car insurance companies can vary widely in terms of quality, price, and coverage. Do your research today to find the best, legitimate car insurance company for your unique budget and lifestyle.

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