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To many drivers, car insurance is simply numbers on a piece of paper that ensure you meet the state requirements for auto insurance. However, if you ever need to file a car insurance claim, you will quickly realize how powerful those numbers are to your financial security. In order to acquire the best car insurance possible, it is necessary to check an auto insurance’s policy ratings to ensure they are able to meet your needs. In fact, when searching for car insurance, an auto insurance company’s rating can be a driver’s best friend.

Companies that Assign Ratings to Car Insurance Companies

There are a variety of companies that assign ratings to car insurance companies. These ratings can help consumers determine a car insurance company’s reliability. In some situations, these ratings even reveal past customer’s satisfaction with a particular company. The three major companies that provide these ratings are A.M. Best, Standard and Poor’s and J.D. Power and Associates.

A.M Best and Standard and Poor’s

A.M. Best, founded in 1899, is a rating agency that is recognized by the United States Securities and Exchange Commission. Standard and Poor’s is an American financial security company that was originally founded in 1860. A.M. Best and Standard and Poor’s determine car insurance company ratings using the same method. Both companies provide overall ratings based on the financial strength of a particular auto insurance company. This information is pertinent to consumers because it expresses a company’s ability to pay for damages. An auto insurance company with a strong rating shows customers that they have the financial means to pay costly car insurance claims.

On the other hand, car insurance companies with a poor A.M. Best or Standard and Poor’s rating may be a risky financial decision for consumers. A low rating with either of these companies can also mean that these particular car insurance companies may not be very stable. If an auto insurance company goes out of business, consumers could find themselves uninsured and in a desperate situation to quickly find a new auto insurance company.

J.D. Power and Associates

J.D. Power and Associates is a global marketing information service, which was founded in 1968. This service bases the ratings they assign to individual car insurance companies on a variety of factors. Factors that determine an auto insurance companies rating with J.D. Power and Associates include the company’s coverage options, the average price of a 12-month premium, customer satisfaction with a particular company and customer satisfaction with the insurance company’s employees including brokers, insurance adjusters and customer service representatives.

State Insurance Departments

In addition to the companies mentioned above, consumers can also investigate a particular car insurance company with their local State Insurance Department. Most states base their ratings on a car insurance company’s customer satisfaction.

While it is true that you can talk to family and friends about the type of car insurance you are considering, you may not get the best advice for your particular situation. By examining a car insurance company’s rating with the above listed companies, you will get honest feedback from a large sample of people. Armed with this information, you can make the best possible decision to meet your car insurance needs.

Dennis Gilroy is a professional insurance agent who also writes for a number of websites. Imparting his knowledge of the industry so people can make the best decisions is important to him. Click for access to free auto insurance quotes from