looking for new auto insurance and some are much less than others but I was told by some that the low quotes are from low rated companies, so how do they define high rated from low rated?
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how do automobile insurance companies get their ratings?
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There are several companies that rate the insurance companies. We go with A. M. Best’s ratings. The look various items that say how well the company is doing and how likely they are going to have the money to pay claims. A lower rated company does not have as much money, so in the event of a lot of losses they may not have the money to pay all the claims. Example of a major loss is Katrina. Some insurance companies went out of business due to all the money they had to pay.