Rating the Insurers
Before you buy an auto insurance policy, you want to make sure the insurer you're buying it from has the financial resources to pay its claims.
If you pick one of the major auto insurers, chances are slim that it can't pay its claims. However, if you're looking for affordable premiums and turn to a smaller or unfamiliar insurer, you will certainly want to check its financial health.
Standard & Poor's and Moody's Investors Service are two credit-rating agencies that rate insurers for their claims-paying abilities and financial strength. Other major companies that rate insurers are A.M. Best Co., Fitch Ratings and TheStreet.com.
Insurers with the highest ratings receive a rating of AAA (S&P) or Aa3 (Moody's). These are often called triple-A ratings. It's a good idea to find an insurer that has at least a single-A rating.
Your insurance policy is only as good as the financial health of the insurance firm that sells it to you. Rating the insurer before you buy a policy from it is a wise first step.