Rating Auto Insurance Companies

Rating Auto Insurance Companies

November, 2016

Dear Care for Crash Victims Community Members:
Consumer Reports
Consumer Reports rates auto insurance companies and found USAA, Amica, and NJM had the highest Reader Scores.  See http://www.consumerreports.org/products/car-insurance/ratings-overview/
NY Times

Now the NY Times published an article on auto insurance that gives useful information to consumers citing work created by a crash victim.  The same three auto companies were found to be highly rated.

“There’s a conflict here between shareholders and policyholders,” Mr. Karr said. “We’re showing how companies have run their businesses, and that’s not always in the interest of the policyholder.”


The ValChoice study divided the auto insurance market into three types of companies. The largest group — 48.3 percent — are publicly traded corporations like Allstate, Geico (which is part of Warren E. Buffett’s Berkshire Hathaway conglomerate) and Progressive.


Among mutual companies, there are two different business models. Some companies return earnings to their policyholders in the form of dividends, while others do not pay dividends but keep the earnings at the company.

Mutual companies that do not consistently pay dividends to auto policyholders make up 42.3 percent of the market; Liberty Mutual is one of them.


Those that do pay dividends are the smallest subset of the market, with approximately 8 percent, ValChoice said. Also sometimes known as reciprocal insurance exchanges, they include USAA, the Automobile Club of Southern California, Amica Mutual and NJM Insurance….


When shopping for insurance, consumers often focus solely on price. Figuring out the differences in claims payment histories at companies is much harder to do because the data is not readily available and requires significant digging to unearth. Analyzing the data, Mr. Karr said, can give consumers a better idea of the value they are receiving for the insurance premiums they pay.


“The paid loss ratio is such a direct measure of the actual value of an insurance policy,” said Mr. Karr. “If I’m paying money for insurance, it tells me how much is likely to come back to me if I have an accident.”

In essence, Mr. Karr said, consumers who buy from companies whose claims payments are lower are paying for lesser coverage. That value loss can add up to billions of dollars.


Charles M. Chamness, chief executive of the National Association of Mutual Insurance Companies, agreed. “Mutuals exist to serve policyholders and allow management to focus on service and longtime financial security,” he said.

Mr. Karr got the idea to start ValChoice after he was hit by a car and had trouble getting his medical bills paid by insurers.

“When I came away from it, I thought there was a lot people who needed to know about the operating characteristics of these companies,” Mr. Karr said. “People are mandated by law to buy insurance; they should be able to get quality information about what it is they are buying.”  See 




You can get a free report on your insurance at ValChoice.  See https://www.valchoice.com/

Lou Lombardo


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