A law passed last month by the Missouri State Legislature that will expand insurance regulators’ oversight abilities emphasizes the importance of checking on an auto insurance companies’ financial stability before choosing a policy. The law, which took effect Aug. 28, details standards to be used in determining when Missouri car insurance companies and other coverage providers can be considered financially unstable — potentially allowing for earlier intervention.
Although the new law helps protect consumers from crumbling companies, prospective policyholders should still look around for the best rated car insurance in order to protect themselves. Having a policy — or, worse, an outstanding claim — with a crumbling insurer can become a serious headache. Insurance companies that are ushered into receivership or liquidation by state regulators could take months to pay on outstanding claims; and claims in some cases may be paid only through state-created guaranty associations.
The Missouri law, in theory, will lessen the likelihood that insurance companies in the state will find themselves in a position in which they cannot pay claims. It should do this by allowing state regulators to intervene in the workings of floundering companies before they’ve actually become insolvent. The state insurance commissioner stated his hopes that, though many rehabilitations of insolvent insurers have been unsuccessful, the legislation will allow for greater success and provide greater protection to consumers.
Luckily, Internet resources make it easy for today’s consumers to evaluate an insurer’s strength and to avoid getting coverage from such shaky institutions. These resources come in the form of independent rating organizations that evaluate the financial viability of insurers and assign easy-to-understand letter grades that indicate the strength of the company.
To learn more about rating agencies, consumers can go to http://www.onlineautoinsurance.com/companies/ratings/ where visitors will also be able to quickly compare personally tailored quotes from a variety of reputable carriers.