5 of the Worst Rated Auto Insurance Companies
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UPDATED: Mar 18, 2019
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According to consumers in the North Central region of the country, 5 of the worst rated auto insurance companies include Automobile Club Group (ACG), Farmers, Nationwide, The Hanover, and The Hartford.
These ratings are current as of 2012 and are based off of five categories related to insurance companies.
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When rated according to different factors, such as claims and finances, the results were mixed. There are many ways to rate and judge an insurance company and sometimes it can be subjective, based on the personal experience of drivers.
When you are looking for a company with which to insure your car, you should research a number of different things before making a decision and not just base your choice solely on the word of others.
General Company Ratings
One of the ways that auto insurance companies are rated is from consumer opinions. J.D. Power and Associates is a company that collects data from consumer surveys and publishes the results on its website.
One of the things that J.D. Power reports on is how the providers themselves were rated in regards to general categories.
The general categories include pricing, policy offerings, how easy it is to contact the insurer, billing and payment, and overall satisfaction.
J.D. Power takes the data from its consumer surveys and rates them accordingly. The scores shown on its website are five stars, which stands for being among the best, four stars for being better than most, three stars for being about average, and two stars for the rest.
In regards to five of the worst-rated car insurance companies, all of them received two stars for overall satisfaction. Most of them received two stars in all of the other categories as well.
The Automobile Club Group received three stars for its policy offerings, The Hanover received three for contacting the insurer, and The Hartford got three stars for pricing.
How a car insurance company handles claims is a big thing. Having accidents and other claims paid fairly is one of the main reasons that drivers get car insurance. If a driver has a poor experience with the claims process of a company there is a pretty good chance a company switch is in the future.
J.D. Power and Associates also publishes ratings based off of how car insurance companies handle claims.
In regards to claims, overall satisfaction is rated, as is the first notice of loss, appraisal, service interaction, rental car experience, repair process, and settlement.
Some of the five previously mentioned insurance companies rated higher in the eyes of consumers in regards to claims, while others kept their low ratings. The Automobile Club Group got a two star rating in every category except for settlement, for which it got three stars.
Farmers Insurance received two star ratings in most categories except for appraisal and repair process, which gained it three stars for each. Nationwide rated higher, with three stars in each claim category.
The Hanover also received three stars across the board. The Hartford rated the highest compared to the other four insurance providers. It received three stars in most of the categories except for first notice of loss, repair process, and overall satisfaction, in which it got four stars.
If you are currently insured with a company that is not handling your claim effectively, there are steps that you can take. The Insurance Information Institute has tips on how to handle poor claims processing.
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One of the aspects of researching and choosing an auto insurance company is how they rate financially. These ratings are based on more facts rather than subjective opinions by individuals.
A.M. Best is one of the leading companies that rates individual insurance companies.
A.M. Best ratings of each insurance provider are based on an evaluation of the comprehensive qualitative and quantitative qualities of each company.
This independent entity looks at the business profile, operating performance, and balance sheet strength of each company. It also will sometimes look into the details and reason into any debt security.
Each company is given a rating for issuer credit, financial strength, and debt. An opinion of how the company will perform and last into the future is also provided.
The Automobile Club Group, which is actually underwritten by AAA, scores an A+ financial stability rating, a long time issuer credit rating of “aa-”, and has a stable outlook. Farmers Insurance Company receives an A financial stability rating, an “a” for issuer credit rating, and a stable outlook.
Nationwide Insurance Company receives an A+ for financial stability, an “aa-” for issuer credit, but has a negative outlook, which indicates that there is a good chance that its ratings will decrease in the near future.
The Hanover does not show a current financial stability rating but its issuer credit rating is “bbb” and its outlook is stable.
The Hartford is underwritten by Hartford Fire Insurance Company out of Hartford, Connecticut. Its financial strength rating is an A, its issuer credit rating is an “a+”, and there is no current information about its outlook.
All of these insurance companies have a fairly good financial standing. This goes to show that, just because a company is financially stable, it doesn’t necessarily mean the company scores high in other areas, or is a favorite of consumers.
This being said, you want to make sure you choose a company with a good rating from A.M. Best; preferably an A- or higher.
When judging whether an insurance company is a good choice or not, it is a wise idea to see if any complaints have been made against the company, and for what reasons. There are a couple of different resources to use when finding out this information. One is your state insurance department.
To find the contact information for your state, you can use this map from FindLaw.com.
Your state’s insurance department is a good resource for many insurance-related issues. They will often have information about complaints that have been made against a company, as well as information such as if a company is registered in the state or what the state requirements for insurance coverage are.
The Better Business Bureau in your area is another resource. You can look up particular auto insurance offices in your zip code or city and see how many complaints they have received, as well as how the offices dealt with the complaints.
The BBB lists complaints according to type. The types include billing and collection issues, sales and advertising issues, problems with service or product, delivery issues, and issues with warranty or guarantee.
If you are considering any of the insurance companies listed previously, see how they stack up locally by checking with your Better Business Bureau.
Auto Insurance Rates
Rates for car insurance are a big factor in choosing a company for most drivers. Some will pick a provider based only off of price, which is not always the best way to go. By doing so, you may end up with a provider that rates low in all other areas.
Sometimes, in order to get a company that is trustworthy, you may need to pay a little more for your premiums. This being said, high rates do not necessarily equal a great company.
It is imperative that you do your research in all areas to make sure that you are making the best choice.
Word of Mouth
People have many reasons why they may not like a particular insurance company. That is why sometimes it is better to ask people around you rather than just go off of Internet-based opinions, such as J.D. Power.
Friends, colleagues, and family members are all good resources to speak with when trying to decide on a car insurance company to use.
Talk to the people closest to you to find out who they use for insuring their vehicles and ask how they would rate them. It also helps to speak with those drivers in the same situation as you, as certain companies serve particular needs better than others.
If you have a teenage driver, for example, talk with other parents to see who gives discounts to good students and other discounts for teen drivers to keep rates lower. If you are a high-risk driver and are having trouble finding a company that will insure you, talk with others who are high risk as well and find out which company they use.
If you are on a tight budget and need to find a cheaper policy that is still reputable, ask around about that as well.
The opinions of the people around you are often the best way to find what you need.
Although the five insurance companies listed here are considered to be low-rated companies by some drivers, if you asked a different group of drivers the answers may be different. Do thorough research of a company and choose one that seems to be the best for your specific insurance needs.
You can always change companies in the future if you become unsatisfied.
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