How ValuePenguin Evaluates Insurance Companies
When ValuePenguin reviews an insurance company, we want to be sure that the company offers steadfast coverage and helpful service at a price that is worth it.
What star ratings mean
We rate insurance companies on a scale of one to five stars.
5.0 out of 5 | 5 stars: Best-in-class |
4.0 out of 5 | 4 stars: Excellent |
3.0 out of 5 | 3 stars: Good |
2.0 out of 5 | 2 stars: Mediocre |
1.0 out of 5 | 1 star: Poor |
We always evaluate insurance companies by directly comparing them to their peers, whether that's an auto insurance company available nationwide or a regional health insurance company regional health insurance company selling plans in New England.
That helps us make fair comparisons and provide the best answers we can for our readers.
Our scoring methodology
We break our review scores up into four sections: price, policy offerings, customer service and "unique value" — whether the company offers something that sets it apart from its competitors.
Factors in each star rating
- 30% Price
- 30% Customer service
- 30% Policy offerings
- 10% Unique value
Price
We always start with price when it comes to reviewing an insurance company.
A company might have the best coverage and most reliable service in the world, but if it's not affordable, then it's probably not the right insurance company for you.
To evaluate price, we look at how much an insurance company charges, either across the country or the areas where it's most popular, for the types of coverage it most commonly provides. We then compare it to its peer companies to calculate a score.
We aim to have an authoritative sample that accurately reflects where an insurance company sells coverage.
- For major national insurance companies like State Farm or Geico, we compile average rates across the country to reflect the company's national presence.
- For smaller regional companies, we gather sample quotes in some or all of the states where they operate — for example, our review of Enumclaw Insurance is based on its prices in Washington, its home state and where it does the majority of its business.
What about discounts?
We love discounts, and they're a great way to save money on insurance. We look at companies' discounts when reviewing them, but we don't directly compare discounts in our rating methodology.
Ultimately, what matters is the lowest price: if you're getting an extra 10% discount at Company A but Company B still has a lower price, you should go with Company B.
Customer service
Reliable insurance coverage is just as important as finding a good deal.
The cheapest coverage in the world is not worth buying if you can't count on your insurance company to be there when you need it.
When evaluating an insurance company's customer service, we look at three main factors:
1. Complaint Index from the NAIC
We always look at how many complaints an insurance company has received, compared to other insurers, according to the National Association of Insurance Commissioners' (NAIC) Complaint Index.
- This score is calculated by comparing the number of complaints an insurance company has received through state departments of insurance, and how many dollars of insurance premiums it collects.
- If a company has 1% market share of insurance and receives 1% of all the complaints, it's average and it has a complaint index of 1.00. A lower score is better, meaning the company gets fewer complaints.
2. Customer surveys from J.D. Power
We reference J.D. Power's customer satisfaction surveys for auto, home, renters and Medicare insurance, when they're available. These surveys ask current customers what they think of their insurance company in a variety of areas, including price, claims service and trustworthiness.
3. Firsthand experience, when possible
We evaluate the process of getting a quote, when possible. If our writer and editors actually have (or previously had) a policy with an insurance company, we also consider their experience interacting with that company directly for things like getting quotes, renewing coverage and making a claim.
Policy offerings
Every insurance company offers a different set of coverage options that may be wide-ranging and useful or limited and unnecessary.
We look at the variety of coverage options available, and how useful they are: For example, a home insurance company might get a lot of points if it offers extra wildfire protection in California or generous flood coverage along the Gulf Coast.
This year, our team has reviewed:
Unique value
When ranking a company's unique value, we look for something that sets the company apart from its competitors, whether that's a special coverage or especially dedicated service. It also gives us a chance to rely on our own expertise and adjust a company's rating up or down slightly based on our knowledge and experience.
For example, in our review of Chubb Insurance, we give the company full marks in this category because it offers an unusually generous claims payout policy, including a full cash-out option if your home is totally destroyed.
Region-specific reviews
Insurance companies are run separately on the state level, so in addition to our national reviews that serve as overall analyses of a company, we create region-specific reviews, like the Best Car Insurance in New York or Best Cheap Health Insurance in Wyoming.
On those pages, we'll sometimes give a company a different review score for how it specifically performs in that state.
For example, Farmers home insurance received a better rating in Massachusetts than California because its prices in Massachusetts are very affordable, but its prices in California are fairly high compared to the state average.
Also, not every insurance company is available in every state, so even if a company's performance is consistent from state to state, it may not hold up as well in a state with stronger competition, making it a less appealing option.
About the Author
Lead Writer
Matt Timmons is a Lead Writer on the insurance team at ValuePenguin, where he writes in-depth and timely pieces helping find the right coverage for them.
He's covered insurance at ValuePenguin since 2018, specializing in auto and home insurance, as well as life insurance. He's paid special attention to the EV insurance market, where prices are much higher than for gas cars.
Before he started writing about personal finance, Matt wrote about professional skills and online tools at an e-learning company.
How insurance helped Matt
During freshman orientation in college, Matt's iPod was stolen off his table while he was eating lunch. Luckily, he'd bought a college insurance plan the day before and he had money to buy a replacement before classes started.
Expertise
- Auto insurance
- Home insurance
- Insurance rate analysis
- Life insurance
Referenced by
- CNBC
- Miami Herald
- Yahoo! Finance
Education
- BA, Wesleyan University
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
