Protect your assets: the lowdown on property, liability, disability, auto, and office equipment policies - Special Guide to Insurance - includes related articles on how to find an agent, comparing insurance costs and organizations that rate insurance companies - Tutorial

Home Office Computing, March, 1994 by Linda Stern

* What do you want to know? (A good broker asks you lots of questions, too, notes Michigan insurance agent Dave Tiedgen. If she's too quick to quote rates, she may not understand your complete situation.)

Start Here Insurance, like politics, is local. Therefore, a company that runs a solid underwriting business in Kentucky might be financially weak in Vermont. The best way to pick a company is to find a broker you trust, check the rating agencies, look for referrals, and make your own decisions. Here's a list of resources to get you started. Note that even magazines have fine print; and ours says we're not endorsing the policies listed here as the best or only good ones in the business. But it's a start.

National Insurance Consumers Organization is the leading consumer group on many insurance issues, but the brains and mouthpiece behind it, Robert Hunter, recently left NICO to become the Texas insurance commissioner. At press time, NICO is seeking a new spokesperson and is barely responsive to phone calls. But an informative book, Taking the Bite Out of Insurance, is still available for $11.95 from NICO, 121 Payne St., Alexandria, VA 22314; (703) 549-8050.

Insurance Information Institute is industry funded, but it offers decent general information about property casualty insurance. The group sells a book called Insuring Your Business for $22.50 and distributes various pamphlets for free. To get materials, contact the National Insurance Consumers Hotline at (800) 942-4242.

National Association of Insurance Commissioners is a good source of general information about insurance regulations. Write them at 120 W. 12 St., Suite 1100, Kansas City, MO 64105.

Rating the Companies

You don't want to buy insurance from a company that may go bankrupt or that keeps too little money on hand to pay its claims. Check with the insurance-ratings agencies we list here to determine how solvent your chosen insurer is. A.M. Best is the grandfather of the insurance-rating agencies; Weiss Research is the cautious upstart that has upset the industry, but it also has predicted more insurance problems than the competition. Keep in mind that Standard & Poor's, Moody's, and Duff & Phelps all are paid by the companies they rate; nevertheless, they offer respectable reports on the insurers.

Each rating agency sells or distributes many products. Call to find out whether affordable reports are available for the insurers you are considering, or look them up in the library.

Remember that these agencies rate the financial health of the insurance companies, not their claims records or reputations. To find out about a company's complaint record and claims history, check with your state insurance commissioner's office. Note that a company with a lot of complaints might not be bad, it might just be a big company. So get some perspective.

A.M. Best, Ambest Rd., Oldwick, NJ 08858; (908) 439-2200, (900) 555-2378

Duff & Phelps, 55 E. Monroe St., Chicago, IL 60603; (312) 368-3157

Moody's Investors Services, 99 Church St., New York, NY 10007; (212) 553-0377