How to Check if an Auto Insurance Company Is Legitimate in 2024 (Our Guided Approach)

When shopping for a policy, check if an auto insurance company is legitimate by viewing their website, verifying licensing, checking reviews and ratings, and reviewing the policy.

The best auto insurance companies have various auto insurance policies that protect a person in an accident with repairs, medical bills, car rentals, and even car replacements. This is why investing in a quality insurance plan with a reputable insurance company is important.

Today, the smallest and biggest auto insurance companies offer policies to car owners. It is important to do research to determine whether the auto insurance company is legitimate.

Read on to learn how to check if an insurance company is legitimate. You can also enter your ZIP code into our free car insurance tool to find quotes from legitimate auto insurance companies.

5 Easy Steps on Verifying a Car Insurer’s Legitimacy

Step #1 – Look at the Website

One of the first things a person should look for is the company’s website to check if company is legitimate. Start by researching the insurance company online. Look for their official website and read about their history, mission, and values.

Here, one can spot some telling signs about whether or not the insurance group is professional, credible, and reliable. When clicking around the website, consider:

• Website Design: Professional insurance companies have well-designed websites that are easy to maneuver. There should be very few pop-ups, the images should be high quality, and information should be easy to find.
• Clear Policy Information: It is important that a website includes a variety of information about the different policies offered by the company (i.e., everything from home to auto insurance might be offered by the companies).
• Contact Information: There should be clear information about the history and mission of the insurance company. Additionally, the provider’s website should have clear contact information so that people can call, email, or fill out online forms asking for additional information.

Additionally, users should never have to input too much personal information, such as a bank account number or Social Security number, to get a quote (Read More: How to Get an Auto Insurance Quote Without Giving Personal Information).

Usually, auto insurance companies will just request a ZIP code and other simple demographic information, such as your vehicle type, past accidents, and more, when providing a quote. The quote form should look similar to State Farm’s quote form above. If the form looks suspicious or asks for sensitive information, do not fill it out.

You should also be wary of extremely low quotes. If the auto insurance rate you receive seems too good to be true, it may be. Use a quote comparison tool to find the average rates that several companies would charge you, and make sure that quotes fall around that range when shopping at lesser-known companies.

Step #2 – Verify Licensing

Next, you should check if the auto insurance company is licensed to operate in your state. Contact your state’s insurance department or regulatory agency to confirm if the company is licensed and authorized to sell insurance in your state.

Learn More: What are the worst auto insurance companies?

Your state insurance department can provide information about the company’s licensing status and any complaints filed against them when you inquire about any complaints or legal actions against the company.

The state insurance department can also provide additional information or warnings about problematic insurers. A company with legal actions taken against it should be avoided, as it could have scammed other customers.

Step #3 – Check Ratings

Another way to check to see if it is a legitimage auto insurance company is to assess the insurance company’s financial stability by reviewing its ratings from independent rating agencies such as A.M. Best. These ratings indicate the insurer’s ability to meet its financial obligations.

Learn More: Best Auto Insurance Companies According to Consumer Reports

You should also check ratings from sites like BBB or NAIC to see customer satisfaction ratings. To give you an idea of what ratings look like at the top companies in the U.S., we’ve collected scores from rating agencies.

Top 10 U.S. Auto Insurance Provider Ratings

Generally, you’ll want ratings similar to the ones shown above when checking if a company is legitimate. Use the top auto insurance companies’ ratings as a guideline when considering smaller companies that aren’t as well-known. You’ll want your ratings to be similar to the ones below:

• J.D. Power: A rating of 800 or higher.
• BBB: A rating of A or higher.
• Consumer Ratings: A rating of 70 or higher.
• NAIC Complaints: A complaint ratio of 1.0 or lower.
• A.M. Best: A rating of A or higher.

The ratings above suggest a company is financially stable, provides good customer service and addresses claims satisfactorily. Lower ratings could indicate issues with financial management or customer service.

As well, if a company isn’t rated on at least one of the major rating sites, it may not be a legitimate company. If you can’t find insurance ratings from the reputable sites we’ve discussed, this is a red flag that the company may be a scam.

Step #4 – Check Reviews

It is important to read up on any auto insurance company one is considering. Look for reviews and ratings of the company from policyholders and other reputable sources. This can provide insights into their customer service, claims handling, and overall satisfaction levels. This is a chance to read current or past customer feedback as well as articles from experts in the industry.

Similarly, it will help to talk to friends, family members, coworkers, and neighbors about who they have worked with in the past. Ask friends, family, or trusted professionals for recommendations and their experiences with auto insurance companies. Their insights can help you make an informed decision.

Read More: How to Research Auto Insurance Companies Before Buying

They can warn people away from less-than-legitimate groups and can provide recommendations for a legitimate car insurance company if they enjoy their current provider.

Step #5 – Check Policy

A reputable auto insurance company will be specific and clear in the written insurance policy. This is a chance to read up on what is and is not covered by an auto insurance plan.

For example, some policies will only cover car-on-car collisions and not accidents like a tree branch falling on the vehicle. Additionally, some plans will cover glass and some will not.

It is important that a car owner asks questions and thinks about what coverage is needed. A car insurance policy should be customized to a person’s specifications.

Read More: What does proper auto insurance cover?

Legitimate companies offer all policies in writing and are incredibly detailed about what is included. For instance, one may not want medical bills covered with MedPay if they already have great life and health insurance. A legitimate auto insurance company is one that will protect the interests of its customers.

This ensures that a stressful situation like an accident can be dealt with quickly and without tons of paperwork. The best group is one that has a lot of experience, has a proven track record, and is honest about its policies.

Auto insurance is a huge investment. Car owners need to do careful research so that they end up working with industry leaders.

Giving an insurance provider a call is also important. This is a chance to ask questions about everything from the quotes or rates to the filing of claims and specifics of the coverage. The company should provide plenty of information about how it calculates auto insurance premiums, available coverages, and more.

When talking to staff, one needs to pay attention to the staff member’s professionalism. The auto insurance company should be honest and clear about their plans and how they conduct business.

At no point should the potential customer feel uncomfortable. Transparency and direct communication are important when talking with legitimate or reputable insurance groups. One’s gut reaction is usually correct.

What to do if an Auto Insurance Company isn’t Legitimate

If you suspect an auto insurance company is illegitimate or engaged in fraudulent activities, it is important to take the proper steps to report them. If you suspect an auto insurance company isn’t legitimate, follow the following five steps:

1. Gather Evidence: Collect any supporting evidence that raises suspicion about the company’s legitimacy or fraudulent practices. This can include correspondence, policy documents, payment records, or any other relevant information.
2. Contact State Insurance Department: Reach out to your state’s insurance department or regulatory agency to report your concerns. Provide them with detailed information about the company, including their name, contact information, and the specific issues you suspect. The insurance department can investigate the matter further and take appropriate action.
3. File a Complaint: File a complaint against the insurance company with your state insurance department or other relevant consumer protection agencies (Read More: How to File a Complaint Against Your Auto Insurance Company). Provide them with all relevant documentation and details of your experience. This helps create an official record and can assist other potential victims.
4. Consult Legal Advice: Consider seeking legal advice from an attorney specializing in insurance law. They can guide you on the best course of action based on your specific situation and help protect your rights.
5. Warn Others: Share your experience and concerns with friends, family, and online communities. By spreading awareness, you can help others avoid potential scams or fraudulent insurance companies.

Remember, it is essential to act promptly if you suspect fraudulent activities from an auto insurance company. Taking swift action increases the chances of protecting yourself and preventing further harm to others shopping for auto insurance.

Finding The Best Legitimate Auto Insurance Company for You

It is important to read up on any auto insurance company one is considering and check if they are legitimate (Read More: How to Choose an Auto Insurance Company). One of the first things a person should look for if they suspect that auto insurance is a scam from a company is its website.

The auto insurance company should be honest and clear about their plans and how they conduct business.

The right insurance company has a variety of auto insurance policies or plans to help a car owner protect him or herself, trustworthy business practices, and economical rates.

Not sure where to start with looking for a legitimate auto insurance company? Find quotes from legitimate car insurance companies using your ZIP code in our free auto insurance comparison tool.