1) Licensing

As a general rule, we should buy from a company licensed in our state, because then we can
rely on our state insurance department to help if there’s a problem. Not every company is licensed
to operate in each state. In case the company fails to provide compensation, we can seek redress
from the regulatory authority or from a court of law.

1) Price : A lower price may mean we have less coverage. Less coverage means more
money out of our pocket when a loss occurs. A lower price may also mean that
insurance carrier has entered a new market for them so it may not have the experience
another insurer would.

2) Financial stability - A buyer should investigate the financial stability of an

insurance company before buying any insurance product from insurance company to
avoid cheated by them. A good way to do this is to get a copy of their current
financial statement and look out for their profitability and growth rate over the years.
We should find a lot of resources online and online rating services that would give us
a clear insight into the financial strength of an insurance company.

3) Full disclosure – Make sure we know all the terms and conditions of the insurance
policy that we are buying. A good insurance company would be honest and open
about its clauses and conditions but some insurance companies wouldn’t and then
when we file a claim, they would come up with some clauses and reasons why they
cannot pay claims.  We had to always settle for an insurance company with full
disclosure policy. A insurance company must disclose all material facts such as
occupation and personal pursuits which would affect the risk profile and number of
personal accident policies that they have purchased from other insurance companies

4) suitability of products-: The type of products the company offers is also worthy of
note. Most insurance companies offer general insurance products like property, auto,
health and general liability insurance policies but the type of insurance that our
business needs depends on the kind of business we do and the industry we operate in.

5) payment claim - when things do go wrong or we are involved in an unexpected accident,

disaster or other loss that is covered by our insurance policy we can make a claim with
our insurer. For example , general insurance companies promise to respond to claim within
10 days    and tell to us whether they will accept or deny our claim based on the information
that we have provided to them.