Your Insurance Carrier: Friend Or Foe?

An insurance carrier is a company that sells and fulfils insurance contracts. Insurance carriers provide insurance coverage and are responsible for underwriting insurance plans and issuing payments for claims. They offer a wide variety of coverage types and policies to fit every consumer’s unique needs. When you file an insurance claim, your insurance carrier will review, investigate, and process it. If your claim is approved, your provider will pay out their share of the agreed-upon reimbursement benefits.

Insurance carrier vs insurance provider

An insurance carrier is another name for an insurance company. It is the company that provides your insurance coverage and underwrites your policy. Insurance carriers create insurance policies, decide what the policy will cover, set the limit on how much will be paid out if there's a claim, take on responsibility for the policyholder's risk, and pay out claims. Carriers can be classified as either mutual companies (owned by policyholders) or proprietary companies (owned by shareholders). Some examples of large insurance carriers include State Farm, Allstate, and Progressive.

An insurance provider is a synonym for an insurance carrier or insurance company. The term "provider" is more often used to describe the hospitals and doctors who provide healthcare services. However, it can also be used interchangeably with "carrier" and "insurer" to refer to the company behind your insurance policy.

An insurance agency, on the other hand, is an intermediary between the insurance carrier and the consumer. Insurance agencies are sometimes referred to as insurance agents. They are authorized by the carrier to sell the insurer's products in exchange for compensation. Agencies can be independent, offering products from various carriers, or captive/exclusive, selling policies for only one insurance carrier. Independent agents can offer a wider range of insurance coverage options by shopping around from different carriers, while captive agents are limited to the options provided by their single carrier.

While an insurance carrier creates and provides the insurance policy, an insurance agency sells and services it. Insurance carriers assume the risk associated with the policies they write and are tightly regulated by the government to ensure they have the financial resources to cover that risk. Insurance agencies, as intermediaries, are regulated by the laws of the state in which they operate.

How to find your insurance carrier

The terms 'insurer', 'carrier', and 'insurance company' are used interchangeably, with 'provider' sometimes used as a synonym, although 'provider' more often refers to the hospitals and doctors who provide healthcare services.

If you are looking to find an insurance carrier, there are several methods you can use. Firstly, if you know the insurance company you are looking for, you can search using a partial or full company name to access the insurance company's profile. From there, you can find information about the company's location, former names, reference information (such as license status, company type, and state of domicile), and the lines of insurance the company is authorised to transact.

You can also use the National Association of Insurance Commissioner's company search tool to access reports on complaints, financials, and licensing. This tool allows you to search for company profiles by the kind of insurance they are able to sell in your state.

If you are looking for auto insurance, you can ask your local Department of Motor Vehicles (DMV) for this information. However, you will need to provide your contact information and reasons for the request, and you may be denied if you provide false information. Alternatively, you can speak to your insurance company, especially if the other driver at fault has disappeared and you cannot contact them.

The first step to finding auto insurance information is to file an accident report with the police. The police will then take statements from both drivers and any witnesses, requesting proof of insurance from the drivers. If a driver refuses to provide insurance information, the police will obtain this and enforce the collection of it.

How to assess the financial health of an insurance carrier

When assessing the financial health of an insurance carrier, it is important to remember that the carrier is the company that provides your insurance coverage and is typically the financial resource behind your policy. An insurance carrier is responsible for underwriting insurance plans and issuing payments for claims.

There are several ways to assess the financial health of an insurance carrier. Firstly, it is recommended to research a carrier's reputation and financial health before signing up for a policy. This includes reading through both the good and bad reviews to identify any recurring issues. Additionally, insurance carriers should issue annual reports that provide detailed information about their financial situation. These reports can be reviewed to ensure the company is financially healthy and able to handle claims.

Another way to assess the financial health of an insurance carrier is by checking their credit rating. An insurance company credit rating is the opinion of an independent agency regarding the company's financial strength and ability to pay policyholders' claims. There are four major insurance company rating agencies in the US: A.M. Best, Moody's, Standard & Poor's, and Fitch. Each agency has its own rating scale, and it is recommended to compare the ratings from multiple agencies to get a comprehensive understanding of a carrier's financial status.

It is also important to consider the financial ratios that connect and compare the various numbers on a company's balance sheet or income statement. Some key financial ratios include liquidity, solvency, profitability, and operating efficiency. Liquidity refers to the amount of cash and easily convertible-to-cash assets a company owns to manage its short-term debt obligations. Solvency is the company's ability to meet its debt obligations on an ongoing basis, and it can be assessed using solvency ratios that calculate a company's long-term debt in relation to its assets or equity. Profitability can be evaluated using metrics such as net margin, which is the ratio of net profits to total revenues. Finally, operating efficiency can be assessed through metrics such as operating margin, which considers a company's basic operational profit margin after deducting variable costs.

How to file a claim with your insurance carrier

Filing an insurance claim is a formal request for compensation for a covered loss or damage. The process often begins with the filing of the claim, which serves to notify the company of an unforeseen incident. This step involves submitting the necessary paperwork, including evidence of the covered loss, to the insurance company. The insurer will then investigate the validity of the claim. If the claim is found to be legitimate, the insurance carrier will issue the payment to the policyholder or an authorised party. Depending on the type of policy, the insured may be required to pay the corresponding deductible before coverage begins.

Step 1: Call the Police if Necessary

If a crime has been committed, someone has been hurt, or there is significant damage, call the police. Although a police report is not necessary for making an insurance claim, it can be helpful. A police report will provide details of the incident and include information that will make the insurance claim process easier.

Step 2: Document Everything and Exchange Information

It is important to document the scene of the accident and gather information from all parties involved. This includes names, addresses, phone numbers, driver's license details, insurance policy numbers, vehicle details, and photos of the accident from multiple angles. If you are injured, keep all medical reports, bills, and other documentation related to your treatment. For homeowners insurance claims, take photos of the damage, make a list of stolen or damaged items, and keep receipts for any temporary repairs or relocation expenses.

Step 3: Contact Your Insurance Company

Get in touch with your insurance company as soon as possible, even if you are not at fault. They will be able to advise you on whether the incident is covered by your policy and guide you through the claims process. Ask them what documents and information are required to support your claim. Most insurers will require a "proof of claim" form and a copy of the police report. Be sure to also clarify any deadlines for filing your claim and submitting relevant bills.

Step 4: File Your Insurance Claim

Most insurance companies allow you to file a claim online, through a mobile app, by phone, or by filling out a claims form and sending it via email or fax. Provide all the requested information and documentation to avoid delays in processing your claim. Keep thorough records of everything related to the claim, including correspondence with the insurance company.

Step 5: Expect an Investigation

After filing your claim, the insurance company may send an adjuster to investigate the accident and assess the damage. The adjuster will determine the cause of the accident and make a recommendation for compensation. If you are dealing with another party's insurance company, remember that their adjuster's goal is to minimise their expenses. Therefore, it is important to thoroughly document the accident and be honest about your injuries and other details.

How to switch insurance carriers

Switching insurance carriers can be a straightforward process, but it's important to do it correctly to avoid penalties, lapses in coverage, and other issues. Here's a detailed guide on how to switch insurance carriers:

Evaluate your current coverage and needs:

Before switching, take some time to review your current insurance policy. Understand the types of coverage you have, the limits, deductibles, and any endorsements or add-ons. Identify areas where you may need more or less coverage, or specific endorsements that better suit your needs. This evaluation will help you make an informed decision when comparing other insurance carriers.

Shop around and compare options:

Start by researching and comparing multiple insurance carriers. Get quotes from at least three different insurers to ensure you're getting a competitive rate. When comparing, pay close attention to coverage options, limits, and deductibles. Consider your personal circumstances and whether you need increased liability coverage, or if it's time to drop certain coverages. Additionally, look into customer service, convenience, and the overall reputation of the insurance company.

Choose a new insurance carrier and purchase the policy:

Once you've found a suitable insurance carrier that meets your needs and offers a competitive rate, it's time to purchase the new policy. Ensure that there is no gap between your current policy's end date and the start date of the new policy. A lapse in coverage can result in higher premiums and legal issues. Schedule the new policy to begin at least one day before your current coverage expires. If you're switching mid-policy, simply choose a start date for your new policy and ensure it overlaps with your current coverage.

Cancel your previous insurance:

After purchasing the new policy, initiate the cancellation process for your old policy. Contact your current insurance company and provide them with the cancellation date. If you've paid for your old policy in full, you may be entitled to a refund for the unused portion. Remember to officially cancel your old policy; simply stopping payments is not sufficient.

Update your insurance ID card:

Obtain proof of insurance from your new insurance carrier. Print out a physical copy of your insurance ID card or download their mobile app to access it digitally. Most states accept digital ID cards, but it's always good to have a physical copy as well.

Notify relevant parties:

If you have a car loan or lease, inform your lender or leasing company about the change in insurance. They will need to be listed on your new policy if they weren't already. Additionally, if you have a mortgage, update your lender about the switch, especially if you pay for homeowners insurance directly.

Review and reassess periodically:

It's recommended to review and reassess your insurance coverage every one to two years. This is especially important if there have been increases in your premium or changes in your personal circumstances that could impact your rates. Regularly evaluating your insurance needs ensures you're getting the best value and coverage.

Frequently asked questions