Texas Car Insurance Companies
When you are shopping for auto insurance in the state of Texas, it is important to purchase your coverage from a company that is licensed by the regulatory National Association of Insurance Commissioners and the Texas Department of Insurance.
While many consumers assume that all companies who are licensed to sell insurance products by the National Association of Insurance Commissioners are reputable, not all Texas car insurance companies are created equal. There are companies that are dedicated to offering quality products and service, and there are companies only focused on collecting premiums.
Read on and learn how you can be a smarter consumer by gathering information about insurers before you purchase your policy. Be sure to check out the FREE comparison tool above as well!
Should price be first priority?
No one wants to feel like they are paying too much for auto insurance in Texas, but you should never rely solely on price when you are buying any type of insurance product. The coverage options and benefits that are provided by an insurer are only as good as the insurer providing the protection.
If a company is known for trying to dodge their obligations by denying claims or a company is not financially secure, you may find it difficult to get the claims payment that you deserve to cover your repairs or your medical bills.
Luckily, there is key information that can be found online that will help you assess an insurance company in Texas before you hand over your money.
Why Low Pricing Could Be a Red Flag
The average cost of auto insurance in Texas is $842.58 per year, according to data collected by the Insurance Research Council. While average premiums do not necessarily show you how much you will pay for coverage based on your own personal rating factors, they can help you look at the big picture before you start pricing insurance.
If you begin receiving quotes and you notice that your premiums are significantly lower than the average with only a specific insurer, this could be a red flag. Based on how the auto insurance industry works in Texas, extremely low premiums could be a negative rather than a positive.
In the Texas auto insurance industry, all insurance companies must file their rates with the Texas Department of Insurance to have them approved. The rating system will assess different risk factors and associate changes in premiums for each individual factor. This is why premiums differ from company to company.
If a specific company would like to target a specific market, they may charge very low premiums to risky drivers to gain new business. The problem with this is that charging premiums that are too low will not provide the company with the money that they need to cover claims filed by Texas drivers.
This creates a hole that can be hard for the company to climb out of and may result in bankruptcy. This is why it is important for Texas car insurance companies to charge competitive premiums that are still adequate.
How to Find a Financially Secure Texas Auto Insurer
Any consumer buying a financial product in Texas like auto insurance should be sure that the provider of the product is financially secure. By choosing a company that collects the money needed to cover claims and is creditworthy, you will have peace of mind in knowing that the provider will be around when you need to file a claim.
You, as a consumer, have the right to access any insurer's financial records in the state. You can review the records yourself if you are familiar with statements, or you can rely on information that is provided by independent ranking agencies like A.M Best or Moody's.
These agencies set their own rating scales and standard to assess the financial condition of auto insurers and more. The ratings are typically letter grades that will help you assess the creditworthiness and financial standing of a company.
Never rely on financial assessments that are made by the actual company that you are purchasing insurance from because it could highlight only positive financial details. Once you find a secure company, you can move on and begin assessing a company based on their complaint index and their customer service reviews.
Check the Auto Insurer's Texas Licensing Status
When a company does not comply with the standards set by the Texas Department of Insurance and the regulatory NAIC it can be warned, fined, or even suspended. It is very important to check a company's licensing status before you buy insurance from a company that is currently being disciplined for discriminatory actions.
You can check a company's licensing status directly through the TDI website by searching for the company profile and entering the company's name. You will be directed to a page with a list of company's, their NAIC number, and their current licensing status. If it is inactive or cancelled, move on to another company.
Look Up Each Company's Complaint Records and Complaint Index
The remaining companies that are financially secure and have an active licensing status should then be researched further by checking their complaint records. This is an important step to take that many consumers skip. All complaints that are filed with the Texas Department of Insurance and the NAIC is public record.
This is public so that consumers can avoid companies that do not handle claims fairly, that misrepresent or that are found guilty of fraud.
There are two different ways that you can find complaint records. You can visit TDI website and use the Internet Complaint Information System (ICIS) which will provide you with summaries of all of the files in the claims database, or you can access records through the National Association of Insurance Commissioners.
Records in the ICIS are specific to Texas insurers and the complaint information through the NAIC is a national database. This database will only show you the complaint counts, ratio report, and trends from recent years. There will not be specifics on the enforcement by the Department of Insurance.
Claims Procedures and Processing
You may not want to file a claim, but you also do not want to purchase insurance from a company in Texas that makes it difficult to file a claim. It is your responsibility as a consumer to look into a company's claims handling reputation.
You should contact claims yourself, see how quickly you can get on the line with an agent, and see if you are comfortable speaking with adjusters. Once you have "secret shopped", you should find out more details with the claims procedure.
Some companies will offer special incentives to clients who use their partner repair shops in Texas. The incentive may include transportation to and from the shop, a rental car, repair guarantees, or guaranteed pricing. You should also ask whether the company pays for original equipment manufacture parts or other generic parts when allowed.
Based on Texas law, insurers may be permitted to use after market or used parts so you should check with the insurer if this concerns you. After all, you do want replacement parts to last as long as possible after a claim.
Contact Methods
How do you prefer to do business? Many people do not consider this when buying insurance online, but it is an important factor to keep in mind. You may enjoy the convenience of pricing auto insurance and purchasing your policy online, but when you have questions and you would like to make changes you may be more comfortable speaking with someone.
If this is the case, be sure that there is a 1-800 number or phone number direct to a local agency that you can call. You should also search for nearby offices if you want to be serviced in person. This is a great option when you want to build a relationship with your agent.
If you like to handle everything online, take a look at the company's online service center to be sure it has the features you will use. Some companies have full-featured websites and others have sites where you can only print your ID cards or make a payment for your premiums.
Online tools are not always important, but most top-rated companies have invested in website tools and mobile apps for the modern day consumer.
The auto insurance industry in Texas has changed. With the growing popularity of the Internet, it is now possible to price insurance, compare quotes, research companies and then purchase your policy all from your living room. If you would like to buy insurance from a top-rated insurer, make sure that you consider the important factors first.
After you have done your research and verified the company is dedicated to being a leader in the market, you can then consider coverage options and pricing. Use the FREE rate comparison tool below to compare the prices offered by multiple Texas car insurance companies, and be resourceful so that you can save time and money.