How to choose the right insurance company like a pro

Finding the right insurance company is stressful. Discover seven considerations to finding the right insurance company that best fits your needs.


Buying insurance can be tedious and overwhelming. From ensuring you are getting a good deal to selecting the right company that matches your needs. Furthermore, it is important to consider each company’s reputation, financial strength, and ability to pay out claims.   

Here are seven considerations when choosing the right insurance company that best fits your needs.



1. Where and how can you buy it?

Let’s start by differentiating the roles of an agent and an insurance company.

An insurance company provides the insurance policy which is a contract listing coverages, policy options, premiums and who is covered. The insurance company mails the insurance policy to the customer, bills them and pays out the claims in case of a loss.

An agent assesses the individual needs and requirements of the customer and supports the customer with finding the right coverage. Agents can help you understand what the policies, coverages and exceptions are. However, they cannot write the insurance policy for the customer, as that is done by the insurance company itself.  Agents are divided into two types: independent and captive.

  • An independent agent can work with several insurance companies at the same time and can be a great source for comparing multiple companies. There are many insurance companies that will only offer their policies through independent agents. 
  • Captive agents are employees or contractors that can only offer the policies of a specific company. State Farm and Farmers are examples of such companies. Even if you get an online quote, you must talk to an agent to purchase the policy.

Another option is to purchase the policy directly from an insurance company. Online channels are a good example of this. The two main options are online first companies such as Lemonade or Esurance, and companies that offer online quotes and transactions in addition to agents such as Geico or Progressive.

Though purchasing insurance online can be significantly more convenient, some may prefer to discuss their needs with an agent to receive advice or guidance through the process.

2. Reputation and reviews

When things go wrong, it is important to know you are in good hands. A company’s history of complaints, as well as customer satisfaction after a claim is made, can be extremely helpful when choosing the right company. There is a great amount of information that can be gathered by visiting insurance company websites and websites that collect customer reviews.

3. Financial strength of the insurance company

If choosing a big brand insurance company for personal auto, home, or life insurance, there generally is no need for worry. However, it might not hurt to double check a company’s Financial Strength Ratings, provided by various rating agencies including AM Best, S&P and Moody’s. All rating agencies have their own criteria for evaluating the financial health of an insurance company and may include the company’s historical performance, assets, liabilities, payouts and net income. 

A positive rating from AM Best, S&P and/or Moody’s, would indicate that the insurance company is in good financial health and has the ability to pay out claims to its customers.

4. What is covered, how good is the coverage, and how flexible are the options?

Even though many things are standard for typical non-business insurance policies, a policy is still a contract and should be treated as such. Details and coverage should be understood clearly. Thankfully, reading the reviews of an insurance company or working with a good agent can help lower the risk of getting a policy with language that is unfair. 

Furthermore, companies vary on their coverage limits and deductibles. Some companies allow very high deductible plans to lower premium payments, while others may limit the options.

saving-for-healthcare-and-medicine-health-insuran-2021-09-04-01-31-38-utc (1)-jpg5. Cheaper is not always better​

This can get tricky! We all want to pay less, but want to get the most for our coverage. The reason why it might be tricky in the insurance market is that lesser premiums may mean various things: 

  • It may mean paying higher amounts out of the pockets in case of loss (deductibles).
  • It may mean less coverage.
  • It may mean a higher chance of claim denial.
  • It may mean worse experience with comes to handling your claim.

As a result, we suggest assessing your needs and expectations followed by a comparison of insurance quotes from different companies. Unfortunately, to lower the cost, many price comparison websites offer the absolute minimum in coverage which can be misleading. It is important to know what you are paying for.

COVU Can help

To simplify the process, we have developed a review system that allows selecting an insurance company to be more comprehensible.

Our review system is built on the following five factors:

Our confidence factor consists of three sub-factors:
  • Financial Strength Ratings
  • JD Claims Satisfaction scores
  • Complaints against the company

The factor reflects how confident a consumer can be in the insurance company’s financial health, its ability to pay out claims and overall satisfaction of its customers. A high score on the confident factor (85 and above) highlights financially stable company who has a good reputation among its customers for paying out claims.

The cost factor combines average annual premiums charged by the insurance companies, cost ratings, value for price ratings and number of discounts offered by the insurance companies. The cost factor highlights how cost effective it is to buy insurance from a particular company relative to others. An interesting detail is in the number of discounts offered by the company. This is because in general, the higher the number of discount offerings, lower are the premiums charged by the insurance companies.

The customer experience factor takes the following into account:
  • BBB rating
  • JD home and auto study ratings
  • JD Digital Service and Shopping ratings
  • Number of products offered 
  • Acceptable forms of payments.

This factor highlights how conveniently a customer can interact with the insurance companies, be it in terms of filing claims, paying for the services or looking up information regarding the policies.

BBB ratings represent the BBB’s opinion of how the business is likely to interact with its customers. The BBB rating is based on information BBB is able to obtain about the business, including complaints received from the public.

Finding the right insurance company is stressful. Discover seven considerations to finding the right insurance company that best fits your needs.

To assess coverage, we look at the standard coverages offered by the insurance companies and also the optional coverages provided by each for additional premium. This helps to compare insurance companies’ coverage flexibility and assessing which insurance company would best meet their needs and requirements.

All the factors considered in our analysis are weighted, along with the sub-factors weighted independently for each factor. The factors and their weights are provided below:

  • Cost (25%)
  • Confidence (25%)
  • Ease and Use (15%)
  • Expert Reviews (30%)
  • Coverage Flexibility (5%)

Our algorithm grades each factor out of a 100, after accounting for all the sub-factor weights. Finally, the overall grade is calculated as the weighted average of all factors.   

6. Customer convenience ​

In today’s fast paced life, companies need to be agile and efficient for how they can interact with their customers, providing timely and convenient options to receive information and purchase products  When selecting an insurance company, it’s important to consider the following:

  • Acceptable forms of payments (cash, credit card, online, multiple installments etc)
  • Available information online
  • Mobile app
  • Ease of access to your policy information
  • Claims reporting online
  • 24/7 omni-channel customer service

7. Available discounts

The availability of discounts may lead to lower premiums. Several insurance companies offer discounts which might be a good idea to research before purchasing a policy or policies. For example with auto insurance, most companies offer discounts for:     

  • Good student discount
  • Good driver discount
  • Anti theft device discount
  • Anti lock brakes discount
  • TeenSmart discount  

A common type of discount across the industry is multi-product or bundling discounts such as buying a car, home, and life insurance all through one company and in return receiving up to 20% discount on all of them. As a result, it might be helpful to consider an insurance company that can fit many of your needs rather than just one.

Do you have the protection you need?

Life is full of risks. To your family. Your assets. Your future. The problem is traditional solutions that propose traditional answers, one policy at a time.

COVU’s fast and free Protection Plan is an unbiased analysis of all your risks. We’ll recommend what insurance to buy — and which policies you can safely cancel to save money.


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