Texas Auto Insurance Companies
As you shop for auto insurance in Texas, it is important to take time to learn about the Texas auto insurance companies that are giving you quotes. In the insurance industry, not all companies are created equal.
There are companies that offer great financial products and service, and there are companies that rely on their marketing to attract customers that they do not keep satisfied because they operate in an industry where consumers are required to buy their products.
Even though auto insurance is required in the Lone Star State does not mean that you are required to buy coverage from a specific provider. In fact, as long as you buy your policy from a company licensed by the Texas Department of Insurance, you are in compliance with financial responsibility laws.
Read on, and learn about the factors that you should consider so that you can avoid the subpar providers and pick the best Texas provider that offers the best premiums and service. Be sure to use the FREE tool above to compare rates!
Why it is important to look past price?
The average household auto insurance expenditure in the state of Texas is $848.11 per year. While this statistic can help you assess whether or not you are considered a high-risk to insurers, if you want to get what you are paying for you should never use price as the deciding factor when you are buying coverage.
Unlike most consumer products and services purchased today, auto insurance is a product that must be bought but that consumers do not want to use. Because of this, you need to be sure that you will get what you are paying for in the form of service and peace of mind before you ever need to file a claim for injuries or damage.
If you do not read reviews and discover that a company has been reprimanded by the Department of Insurance for poor claims handling, you will regret the purchase that you made just to save a few dollars monthly. It is much more practical to simply do your homework as you price shop so that you find a competitive price and a company that performs well.
Why Low Prices Do Not Always Translate Well
There is a difference between extremely low pricing and competitive pricing that is still reasonable. You must understand the different between the two before you buy coverage from a newly licensed Texas auto insurance company that has low-balled their pricing just to build the company's book-of-business.
In the auto insurance industry, all companies must file their rates with the Department of Insurance to prevent discriminatory rating tactics. Once these rates are reviewed and found to be fair, the company can begin offering insurance based on their rates.
If the company does not use risk to justify charging a driver more, they may not be collecting enough premiums to cover the risk that they are taking on. By failing to collect enough dollars, the money that the company has to cover projected claims may not be adequate.
When you choose to buy coverage from a company that does not measure your likelihood of filing a claim with a quality rating system, you are at-risk of having your claims denied when you really need your insurer to be there for you. This is why financial strength and security should always be considered before you consider price.
What is financial strength?
A company can only have financial strength when it charges adequate premiums and focuses on customer retention and attracting new business. In the financial industry, financial records are public record. This means that you can review the records and statements to determine if the company is financially sound.
Because statements can be complicated, there are independent rating agencies that are dedicated to deciphering the information for you.
Some of the well know agencies include Fitch, Moody's, AM Best and Standard & Poor's. While each company uses different grading and ranking systems, they use the same financial and credit information to determine if a company is secure or vulnerable.
Be sure to understand the individual ranking systems, and access the rankings so that you can cross some of the more vulnerable companies off of your list. Every time that you shop for insurance, you should verify the standing of the company to see if their rankings have changed.
What other factors should you weigh when shopping for insurance?
Now that you understand why price is not always the most important factor to consider when you are selecting an auto insurance policy, you should learn how to dive deeper as you do your research.
Financial strength is very important, but after you find secure companies in Texas, you should take the time to identify which of these secure companies offers the types of products and the type of service that you find important. Here are the factors that you should always use to help you rate a company based on your personal standards:
Use the Complaint Index to Your Advantage
It is always best to learn from the mistakes of others because you can learn from their mistakes without being directly affected. Luckily, the Internet makes it possible for you to learn from the mistakes of other consumers when the consumers have taken the time to file official complaints with the department of insurance.
When you do business with a licensed insurer, the insurer is obligated to meet the standards set by the department. The company must answer to the department when a consumer raises a complaint on claim and benefit disputes, false advertising, misrepresentation and fraud.
If you would like to find previous complaint index information, you can locate this information on the Department website directly.
You will be able to see the summaries of the complaints that have been filed each quarter organized by the line of insurance if you access the ICIS, or you can review the company's entire company profile and see the number of complaints that have been found to be justified. Once you find that a company has a bad reputation for processing claims in a timely manner or honoring benefits, you may want to steer clear.
Customer Service and Contact Options
Once you find a Texas auto insurance companies that are financially secure and have a good complaint index and reputation with the department, the next step is to verify that a company excels in the customer service arena. When you call the office or the 800 number, the phone should be answered quickly and you should be greeted.
Agents should always be able to answer your questions or find the correct answer. You can ask friends about their experiences with a company, or use a reputable review platform to see what people across the nation have to say about their own experiences.
In addition to the quality of customer service, you should consider how you will be able to contact the company. Not all consumers are comfortable with the same types of contact methods, and not all Texas auto insurance companies offer the same contact methods.
If you are the type of individual who likes to speak face-to-face, find a company with agents in the area. If convenience is important, find a company with a 1-800 service number or a website where you can access your own policy. Be sure to check the company's website directly to see which methods are available.
Claims Processing and Claims Handling
You pay your auto insurance premiums to Texas auto insurance companies, you are agreeing to fulfill your obligations and the company is agreeing to pay claims that are covered by the coverage options you have selected. There is nothing worse than finding out that you are restricted to using a specific repair company or poor quality auto parts because you failed to do your homework on the claims processing procedure.
You should always ask the company if you can go to your own mechanic, if original equipment manufacture parts will be covered, and how long claims processing typically takes. If you find that you have to go to a partner shop or the company will pay a reduced amount per hour in labor, you may want to find a company dedicated to offering you the flexibility that you value.
Do not assume that you will never need to file a claim, because you need to know all of these details before you are in a stressful situation.
The first time you buy insurance, it is only natural to focus on cost first and everything else second. Avoid making the same mistake more than once, and do your homework so that you choose only the most reputable insurers licensed in Texas. Once you consider the important factors first, you can make your final determination based on price.
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