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Protecting New Car Insurance from Closing Insurance Companies


The increasing number of car owners, be it brand new or secondhand, has brought about a mushrooming of car insurance companies to take advantage from the growing market. As a result, there is stiff competition among all these insurance companies trying to meet sales quotas to keep themselves in business. Otherwise, they would not earn enough to stay in operation. When this happens, they will be forced to close doors permanently and shut down the business.

As a client, you do not want your insurance company to suddenly close down and leave you running after them to get back your money. Thus, you have to be very picky where you will buy your new car insurance. Be a wise buyer and carefully study the capability of a company to stay in business for a long period.

There are several signs you can look into to see if a company is fit to stay for long or if it is bound to close down soon. A company’s trade name is the first thing you can look at. If it is a reputable name that has been selling insurance policies for around ten years now, then it is quite a stable company. It has earned many good feedbacks already and therefore has established a long line of loyal clientele.

Speaking of clientele, having a good number of loyal clients is a good sign that a company can be trusted. If you purchase new car insurance from them, you are basically assured of excellent customer service. They will not earn the loyalty of their customers otherwise. Besides, they have a reputation to protect. They will do their best to satisfy your needs. Your positive feedback is their best form of good advertisement.

Beware of insurance companies offering extremely low insurance rates. Insurance companies profit from the premiums you pay. Where will they possibly get money to pay for your claims in the future if they are not earning enough? Most of these companies are hardly known. If they are not included in the accredited list of insurance companies in your state, it is better to look for new car insurance elsewhere than to risk buying from them.

Fly-by-night schemes are very rampant nowadays. These are companies that sell new car insurance policies at irresistible prices to attract many buyers. Once they got your money, they will suddenly close business and you will never hear from them again. They can easily get away because they use fictitious names and they do not register their business. These schemes usually happen in the internet so practice caution when dealing with such online companies.