You should purchase car insurance from a company that you can trust, a company that is reputable, and a company that has a rating. To find out if an auto insurance company is reputable and reliable may take some research. Also look to friends and neighbors for referrals on what companies they have found to be good and fair.

When researching car insurance companies you can start out by contacting your state's Department of Insurance (or like agency). Most DOIs publish consumer complaint ratios for the insurance companies licensed to sell policies in that state. These ratios can tell you how many complaints an auto insurance company has received per 1,000 claims filed.

Next you can check an insurance company's J.D. Powers rating. J.D. Power and Associates collects data from individual policyholders nationwide and rates them according to coverage options, price, claims handling, satisfaction with company representatives and the overall experience.

You also can look at A.M. Best and Standard and Poor’s ratings. Both companies publish financial strength ratings for all insurance companies. These companies measure an insurance company's ability to pay out a claim. It does not measure customer service though.

The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company's solvency), F (in liquidation) and S (suspended). You normally would only want to choose an insurance company that has at least a B+ rating.

The Standard and Poor's ratings range from AAA (the highest) to CC. Additionally, some companies receive ratings of R (under regulatory supervision) or NR, which stands for Not Rated. The letter grades might be modified by a plus or minus mark. You will probably want a company with at least a BBB rating.

For more information on buying car insurance read some of the articles in our Learning Center such as:

Why Should You Shop Around for Auto Insurance?

Shop for Car Insurance Around Town or From Your House

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