How to choose the right insurance company: 7 tips to protect your future
- Research insurance companies thoroughly, checking resources like the BBB and customer reviews.
- Understand your insurance needs and coverage requirements before comparing quotes.
- Understand the claims process and be aware of potential scams, reporting suspicious behavior to the BBB.
Insurance is one of those things you hope you never need — but when you do, you want to be confident that your provider has your back. Whether it’s health, home, auto or life insurance, choosing the right insurance company is a critical decision for your financial security.
A good insurer helps you manage risk and offers peace of mind. But not all companies deliver on their promises. Understanding how to evaluate insurers can help you make an informed choice and avoid unpleasant surprises down the road.
Here are key tips to keep in mind as you search for a trustworthy insurance provider.
Do your homework
Start by researching insurance companies thoroughly. Check each company's BBB Business Profile at bbb.org to see how long they’ve been in business, whether they’re accredited, and what their customer reviews and complaint history look like. Look for patterns — are customers consistently complaining about claim delays or poor communication?
You can also ask friends, family and colleagues about their experiences with insurance companies. First-hand insights can be just as valuable as online research.
Understand your needs
Before shopping around, make sure you understand what kind of insurance you need and how much coverage is appropriate. The right policy depends on your circumstances — your family size, assets, health status and even your future plans. If you're unsure, consider working with a licensed insurance broker or agent who can explain your options in plain language.
Compare multiple quotes
Don’t settle for the first quote you get. Prices and policy features can vary widely between insurers, even for the same type of coverage. Use the same coverage limits and deductibles when comparing quotes to make sure you’re evaluating apples to apples.
Be cautious of offers that seem too good to be true. A lower premium might mean less coverage or poor customer service when it matters most.
Check licensing and financial stability
Always verify that an insurance company is licensed to operate in your state. You can do this by visiting your state’s department of insurance website. Working with an unlicensed insurer can leave you unprotected if a claim is denied or the company goes out of business.
Also, check the company’s financial strength through independent rating agencies like A.M. Best, Moody’s or Standard & Poor’s. A financially stable insurer is more likely to pay out claims reliably — even during times of widespread disaster or economic stress.
Review policy details carefully
Before signing anything, read the policy thoroughly. Pay close attention to exclusions, deductibles, claim limits and renewal conditions. Ask questions about anything you don’t understand. An honest insurance representative should be willing to explain the fine print and won’t pressure you into buying something you don’t need.
Be wary of high-pressure sales tactics
Legitimate insurers and agents will give you time to review your options. Be cautious if someone pressures you to make a quick decision or uses scare tactics. This is especially important with life insurance or investment-based policies, which can be complex and long-term.
Understand how to file claims
A good insurance company should offer clear, straightforward information on how to file a claim and what to expect throughout the process. Ask how long it typically takes to process claims, whether you can file online, and who to contact with questions.
When disaster strikes, the last thing you want is to navigate a confusing or unresponsive claims process.
Watch out for scams
Unfortunately, the insurance industry isn’t immune to fraud. Watch for red flags like unlicensed agents, upfront fees before receiving a quote, or being asked to share personal financial information too early. If something doesn’t feel right, trust your instincts and report suspicious behavior to BBB.org/ScamTracker.
Know your rights
You have the right to receive a copy of your insurance policy and a full explanation of your benefits. If you feel an insurer has treated you unfairly, you can file a complaint with your state insurance department or the Better Business Bureau.
Choosing the right insurance company is more than just finding a good price — it’s about protecting your home, health, family and future. Take your time, ask the right questions and work with providers you can trust.
To explore trustworthy insurance companies near you or file a complaint, visit BBB.org. For more tips on avoiding scams and making smart financial decisions, check out BBB.org/AvoidScams.
Jan Diaz is the President/CEO of the Better Business Bureau serving Northern Indiana, which serves 23 counties. Contact the BBB at 800-552-4631 or visit www.bbb.org.