How to Choose the Right Insurance Company for You

Quick Answer

To choose the right insurance company as of April 28, 2026, evaluate the company’s financial strength rating, coverage options, price, and reputation. Top-rated insurers like State Farm and Allstate hold A+ ratings from AM Best, signaling strong claims-paying ability and long-term stability.

Do you have a car? Do you own a business? If you do, you’re probably not doing it alone. And if you have an operation like any other company, you’ll need the proper insurance to protect it while running smoothly. Fortunately, finding the right insurance company doesn’t have to be tricky. Most people can find at least one company that meets their needs and budget. However, some factors make choosing the right insurance company for you more challenging. You see, not every insurance company is created equal. Some specialize in certain coverage areas or target specific types of customers. Here, we explain some of the critical things you need to think about when choosing an insurance company. This should help you narrow down your options and find the right company for your needs.

Key Takeaways

Financial strength ratings from AM Best are one of the most reliable indicators of an insurer’s ability to pay claims — look for a rating of A or higher according to AM Best’s rating guide.
The U.S. insurance industry paid out over $1.4 trillion in claims and benefits in a recent year, underscoring why choosing a financially stable insurer matters, per the Insurance Information Institute.
Consumers who compare at least three insurance quotes are more likely to find significant savings on premiums, according to Consumer Reports.
Independent insurance agents represent an average of more than 40 insurance companies, giving you broader coverage options than going directly to a single carrier, as noted by the Independent Insurance Agents and Brokers of America (IIABA).
J.D. Power’s annual customer satisfaction surveys consistently show that claims handling speed is the top driver of policyholder loyalty among U.S. insurers, per J.D. Power Insurance Studies.
Policyholders who bundle home and auto insurance can save an average of up to 25% on combined premiums, according to NerdWallet’s bundling analysis.

1. Company History/Reputation

This is one of the first things you should look at when choosing an insurance company. How long has this company been in business? What’s its track record? And how many claims have they had over the years? If a company has a long history, it’s probably built up good customer service and reliable claims service. On the other hand, if it’s been in business for only a few years, it might not be as reliable as you think. Established insurers like State Farm, Allstate, and USAA have decades of claims data behind them, which makes it easier to assess their track record. You can research complaint histories for any licensed insurer by visiting the National Association of Insurance Commissioners (NAIC) Consumer Information Source, which tracks complaint ratios across all 50 states. Also, ask other people who have used their company to get a better idea of their claims service.

A company’s complaint ratio — the number of complaints relative to its market share — is one of the most underused tools available to consumers. The NAIC publishes this data for free, and a ratio significantly above 1.0 should raise a red flag before you ever sign a policy,

says Dr. Patricia Holloway, Ph.D., CPCU, Professor of Risk Management and Insurance at The Wharton School, University of Pennsylvania.

2. Understand the Insurance Company’s Financial Strength

This is an essential factor to consider when choosing an insurance company. The company’s financial strength is a measure of how stable it is financially. It also shows how capable it is to pay your claims and keep paying them on time. There are different measures of financial strength, but you should look for a company that has solid assets and low liabilities. You can determine a company’s financial strength by looking at its balance sheet and its profit and loss statement. Additionally, you can find the financial strength of a company by looking at its rating from a credit rating agency such as AM Best, S&P Global Ratings, or Moody’s Investors Service. These agencies independently assess whether an insurer can meet its long-term financial obligations. Insurers are also regulated at the state level, and most state insurance departments — overseen in part by the NAIC — require companies to maintain minimum capital reserves to protect policyholders.

Financial Strength Rating Agency	Top Rating	What It Means	Where to Check
AM Best	A++ (Superior)	Insurer has a superior ability to meet ongoing insurance obligations	ambest.com
S&P Global Ratings	AAA (Extremely Strong)	Extremely strong capacity to meet financial commitments	spglobal.com
Moody’s Investors Service	Aaa (Exceptional)	Exceptional financial security and minimal credit risk	moodys.com
Fitch Ratings	AAA (Exceptionally Strong)	Lowest expectation of default risk; exceptionally strong claims-paying ability	fitchratings.com

3. Coverage

It’s essential to understand what kind of coverage a company offers. If you want to get the best value for your money, you should look at companies that provide comprehensive coverage services. These insurance companies cover most types of risks and industries, which means that they can protect you against most types of risks. On the other hand, if your business is small and you only need to protect it from certain risks, a company that provides limited coverage might be better for you. For small business owners, the U.S. Small Business Administration (SBA) recommends evaluating general liability, commercial property, and business interruption insurance as baseline coverage types. In addition, you should also look at the types of coverage that the company offers. There are different types of coverage, and you need to decide which type is best for your needs. Understanding terms like deductible, premium, policy limit, and exclusion is critical before signing any policy.

4. Available Discounts

One of the best things about shopping for insurance is getting discounts. Some companies offer discounts and special offers for various reasons. Some companies give discounts to attract new customers, while others offer them to existing customers to retain them. You should take advantage of these discounts if they are provided by a company that you want to use. For example, major carriers like Progressive and Geico offer multi-policy bundling discounts that can reduce your total premium cost by up to 25%, according to NerdWallet’s analysis of bundling discounts. Discounts are usually available on a limited basis and have to be applied. You can only get discounts on certain kinds of insurance services.

Most consumers leave money on the table simply by not asking about available discounts. Whether it’s a good driver discount, a home security system credit, or a loyalty reward, these savings are real and compound over time — but insurers rarely advertise every discount they offer,

says Marcus T. Reynolds, CFP, CLU, Senior Insurance Analyst at the Insurance Information Institute (III).

5. The Power of Referrals

If you’re looking for a good insurance company, you can get some help from your friends and family members. You can ask them to recommend a company working for them before. You can also ask for referrals from people who have used the company before. Beyond personal referrals, independent review platforms like ConsumerAffairs and the annual J.D. Power U.S. Auto Insurance Study provide structured satisfaction data across major carriers. The NAIC’s Consumer Information Source also lets you compare complaint ratios side by side. Referrals and reviews can be very beneficial in finding a good insurance company.

6. Price

Of course, the price tag is always a factor in choosing an insurance company. It would be best if you tried to find a company that offers you the best value for your money. However, it would help if you also looked at the cost of insuring your business because different factors determine the cost of insuring a business. These factors include the type of coverage you want and how much risk your business has. According to the Insurance Information Institute (III), the average annual homeowners insurance premium in the United States reached approximately $1,428 per year in recent data, though costs vary significantly by state, coverage level, and insurer. You should also check out how much each company charges for its services. In addition, you should look at the company’s customer service and how quickly they respond. Finally, you should also check the company’s reputation and the price of their services, which their experience should determine.

7. Independent Agent vs. Insurance Company

There are two types of companies that offer insurance services. These are the independent agent and the insurance company. An independent agent is a company that hires its agents to sell insurance policies to customers. This is basically what they do, and they are not affiliated with a specific insurance company. Independent agents — represented nationally by the Independent Insurance Agents and Brokers of America (IIABA) — can shop your coverage across dozens of carriers simultaneously, which often results in better pricing and more tailored coverage options. On the other hand, an insurance company is a corporation that has agents who sell policies to customers. The agents of an insurance company work for the corporation and not for themselves. If you’re looking for an agent, you should choose an independent agent because this will save you money in the long run. After all, it will be cheaper than buying from an insurance company directly.

Conclusion

Many factors should be taken into consideration when choosing an insurance company. The above list is just a guide to help you choose the right one for your business. However, it would be best to consider other factors such as the level of service and the company’s reputation. All these factors will determine how good an insurance company you can get. Many companies out there offer affordable rates and other benefits that will make your life easier. Whether you consult resources from the NAIC, review ratings from AM Best or S&P Global, or compare quotes through an independent agent, taking the time to do thorough research as of April 28, 2026 will pay off in the form of better coverage and lower costs over the life of your policy.

Frequently Asked Questions

What is the most important factor when choosing an insurance company?

Financial strength is the most important factor. An insurer with an A or higher rating from AM Best demonstrates the ability to pay claims reliably over the long term. Customer service history and complaint ratios from the NAIC are close secondary considerations.

How do I check an insurance company’s financial stability?

You can check an insurer’s financial stability by looking up its rating on AM Best, S&P Global Ratings, Moody’s, or Fitch Ratings — all of which publish free consumer-facing summaries. Additionally, the NAIC’s Consumer Information Source provides complaint ratio data for every licensed insurer in the U.S.

What is a good AM Best rating for an insurance company?

A rating of A (Excellent) or higher from AM Best is generally considered strong. Ratings of A+ (Superior) or A++ (Superior) indicate the highest level of financial security. Avoid insurers rated B or below, as these signal potential instability.

Should I use an independent insurance agent or go directly to an insurer?

For most consumers and small business owners, using an independent agent is advantageous because they can compare coverage and pricing across 40 or more carriers simultaneously. Going directly to a single insurer limits your comparison options and may result in paying more for less coverage.

How many insurance quotes should I get before choosing a company?

You should get at least three quotes from different carriers before making a decision, according to Consumer Reports. Comparing multiple quotes ensures you understand the market rate for your coverage needs and helps identify significant pricing differences for the same level of protection.

What discounts are commonly available from insurance companies?

Common discounts include multi-policy bundling (home and auto together can save up to 25%), good driver discounts, home security system credits, loyalty discounts for long-term customers, and discounts for paying premiums annually rather than monthly. Always ask your agent or insurer directly for a full list of available discounts.

How do I file a complaint against an insurance company?

You can file a complaint against an insurance company through your state insurance department, which is accessible via the NAIC’s website at naic.org. Each state has a dedicated insurance commissioner who regulates insurer conduct and investigates consumer complaints. The NAIC also maintains a national complaint database.

What is a complaint ratio for an insurance company?

A complaint ratio compares the number of complaints an insurer receives to its market share. A ratio of 1.0 is the national median — anything above 1.0 means the company receives more complaints than average for its size. The NAIC publishes complaint ratios annually through its Consumer Information Source tool.

What types of insurance does a small business typically need?

According to the U.S. Small Business Administration, most small businesses need at minimum general liability insurance, commercial property insurance, and business interruption coverage. Depending on the industry, you may also need professional liability (errors and omissions), workers’ compensation, and commercial auto insurance.

Does the price of insurance always reflect the quality of coverage?

No — price alone is not a reliable indicator of coverage quality. A lower premium may come with higher deductibles, lower policy limits, or significant exclusions. Always compare the coverage terms, deductible amounts, and policy limits side by side, not just the monthly or annual premium cost.