Insurance Methodology: How We Rate Companies and Their Products

We judge insurers across cost, coverage and customer experience, all to make sure you find the best policy for your situation.

Written by Andrew Pentis / July 6, 2022

When you’re shopping around for an insurance policy, you might be overwhelmed by the options. It’s like visiting the cereal aisle at the grocery store: There’s just too much to consider.

At Sound Dollar, part of our mission is to help you with your financial decision-making by kickstarting the research process for you, and narrowing down your options to the best ones available. In reviewing insurance products—from auto and pet to renters and life—we take on the role of your personal shopper, surveying all of the top providers on things like cost, breadth of coverage and customer service.

Because we want you to end up with the best insurance policy for your unique situation, we take the research additional steps further. We also collect sample rate quotes that can at least give you a directional indication of which companies may be more cost-effective. We also compare sample policies to determine which providers have the least fine print, limitations and exclusions in their coverage.

But, of course, every insurance product is unique, too, so we also detail our specific research methodology for each below.

Inside this article

  1. How we review insurance carriers
  2. Pet insurance methodology
  3. Auto insurance methodology
  4. Renters insurance methodology
  5. Life insurance methodology

How we review insurance companies

The key is making apples-to-apples comparisons. To do that, we come up with a list of important questions that all consumers should be asking to properly evaluate an insurance product. Then we pose these questions to the insurers themselves.

Inevitably, these pressing questions fall into one of three buckets: cost, coverage and customer service. By categorizing insurers’ answers this way, we can make additional apples-to-apples comparisons. We might say that one insurance company is best for your budget, for example, while another is best for expansive coverage options or customer support.

So besides researching the eligibility and reliability of insurance products, we spend most of our time comparing their scores across these all-important categories.

Cost

This category is most likely to affect your budget or bottom line, so it’s the one we weight heaviest—it’s three times as important as customer service, for example.

Cost can be examined in a few different ways, however. We look at factors including:

  • Whether it’s easy to customize your cost by choosing coverage and payout limits and deductibles

  • If there are meaningful discounts available, or other ways to save on your premium

  • If the quoted monthly or annual premiums are competitive

On that last point, we act as a prospective customer and pull quotes from all insurers under consideration. For pet insurance, for example, we requested pricing for a 5-year, mixed-breed, medium-sized, female dog to ensure the apples-to-apples comparison. Then we lined up all of the companies’ quotes, identified the median (or middle) price and awarded companies that quoted below it. (Companies with higher-than-median quotes were effectively penalized.) In some cases, we also compare our quotes to national averages published by reputable third parties, such as industry associations.

Coverage

What good is the cheapest insurance policy if it doesn’t cover what you need covered? Not much. That’s why coverage is another key category we use to evaluate insurers—it’s weighted twice as much as the customer service category.

Determining how much coverage is offered and how often can be especially tricky, as insurers are known to hide fine print in their policies. A pet insurance policy might only cover veterinarian-prescribed dog or cat food, for example, if it’s part of a treatment plan for a covered condition. Yes, we read through this fine print for you.

Here are other factors that are considered in most, if not all, of our insurance product reviews:

  • Whether there are multiple coverage options, or merely pre-set or one-size-fits all policies

  • Whether there are worthwhile add-ons or other supplementary coverage available

  • If secondary, sometimes-forgotten fees (such as veterinary exam fees in the case of pet insurance) are covered or not

  • If applicants’ coverage options are limited by a characteristic of their profile (such as driving history for auto insurance)

Customer experience

Your prospective insurer might deliver the coverage you require at an affordable cost, but what if you can’t get a human on the phone to talk through a claim? That’s where our customer service category comes into play. It might have the least weighting in our scoring model, but it can still determine your final choice for an insurance partner.

Like with cost, we put on the disguise of a potential (sometimes current) customer in an effort to test-drive a company’s external relations. Our belief is that if a company’s customer service team isn’t helpful to you when you’re shopping around, they’re less likely to be helpful once you’ve become a customer.

Though it’s difficult to get a sense of the full experience without being an actual customer, we also find out as much as we can about each insurer’s claims process, knowing that accessing the benefits of coverage can be a real pain point. We try to learn whether claims are handled in-house or are subcontracted, and if the processes of submitting forms and meeting deadlines are more friendly toward the customer or the company.

Beyond burning up the phone lines, using online chats or sending emails, we also rely on user and third-party reviews to vet insurance companies. We look at customer reviews in mobile app stores, for example, and scores or awards that companies have received from independent organizations. Every data point matters.

How we rate companies across these categories

After completing our research—and getting answers to all of our customer-centric questions—we plug our findings into a model that pumps our ratings. As mentioned, we add weight to how insurers compare among the cost and coverage-related questions, but customer service is also key.

Believing that there is some gray area in financial decision-making, we take care to award partial credit, as appropriate, to companies that don’t fully answer a pressing question but also don’t ignore it completely. If an insurer doesn’t cover something in their standard policy but will cover it as part of a competitively-priced add-on or rider, for example, we note that.

Once all of the data has been inputted, we have our rankings. That’s what gives us the confidence to say that an insurer is better than another in certain cases or overall.

Below are the particular methodologies for specific insurance products…

Pet insurance methodology

To recommend the best pet insurance for Sound Dollar readers, we went through the following process in May 2022.

Choosing insurance providers to review

We started with a list of 19 popular pet insurance companies that have reputable pet insurance products. We pared the list down to 15 companies that have policies that are widely available, cutting four that weren’t available in the majority of the country, didn’t offer direct-to-consumer policies or were merely a middleman.

Performing research

We spent about 12 hours collecting 345 data points from 15 popular providers, scouring their websites and sample policies. We also chatted with company representatives and interviewed multiple independent experts, including a former veterinarian, pet owners and a pet insurance agent.

We spotlighted each provider across four categories: eligibility, cost, coverage and customer experience. Given that cost and coverage are often of top concern to pet insurance customers, we weighted these categories more heavily.

  • Eligibility: Is it quick and painless to get an online quote for pets of all ages?How long are the waiting periods for coverage?

  • Cost: Is it above or below the median premium charged by competing insurers, and are there valuable discounts? Is it possible to customize cost by choosing different co-insurance, deductibles and maximum payouts?

  • Coverage: Are policies one-size-fits-all, or can you pick and choose accident and illness coverage? What about routine care, wellness checkups and alternative therapies?

  • Customer experience: Is 24-7 telehealth service—or another worthwhile perk—offered? And is the customer service and its website or app going to make for a seamless claims process?

Collecting sample rate quotes

As part of the cost category, we requested and received rates using sample pet profiles: medium-sized, mixed-breed, 5-year-old female dogs and medium-haired, mixed, 5-year-old male cats hailing from northern California and, when asked, not reporting any major medical history. We also opted for supplementary coverage for medical exam fees unless they were already included.

The vast majority of pet insurance companies offer quotes for dogs and cats. Nationwide was the only widely available provider to also offer pet insurance for exotic animals.

Pie chart showing how Sound Dollar rates pet insurers
Infogram

How the 15 insurance providers fares across the four categories overall determined their rating. Our best pet insurance recommendation, Embrace, scored the highest rating among its class of competitors. Though our other top picks weren’t far behind:

  • Best overall: Embrace

  • Editor’s pick: Figo

  • Best for dogs: ASPCA

  • Best for cats: Spot

  • Best for exotic pets: Nationwide

Auto insurance methodology

To recommend the best auto insurance for Sound Dollar readers, we went through the following process in June 2022.

Choosing insurance providers to review

To be included in our study, auto insurance companies had to:

  • Be among the 10 largest private passenger auto insurance writers in the U.S.

  • Score an A- or higher with AM Best for claims reliability

  • Score above an 800 in the J.D. Power 2021 U.S. Auto Claims Satisfaction Study

  • Offer an average annual rate below $1,600; anything higher would be significantly more than the average annual premium

Performing research

We collected 200 pieces of data for 10 car insurance companies. Our list of best auto insurance providers shrank to seven after three name brands—Farmers, Liberty Mutual and Allstate—were cut because of concerns about policy cost and customer complaints.

We judged each company across four categories: reliability, cost, coverage and customer experience.

  • Reliability: Is its AM Best grade an “A+” or better?

  • Cost: Is the sample annual premium below the national average and our selected cutoff of $1,600? Are there discounts for good driving or bundling? And is accident forgiveness available?

  • Coverage: Are there customizable options for deductibles and coverage limits? And can you easily elect roadside assistance, rental reimbursement and gap insurance, among other add-ons?

  • Customer experience: Does the provider score well among industry organizations—like having an 880 or higher score with J.D. Power? What about its score with the National Association Of Insurance Commissioners? And how does the online or mobile experience compare for customers—do iOS and Android reviews average 4.0 or higher?

Collecting sample rate quotes

As part of the cost category, we requested and received rates using sample consumers throughout the country driving a mid-size SUV (a 2019 Honda CR-V).

To make apples-to-apples comparisons, we also requested the following coverage amounts from each insurer:

  • Bodily injury: $100,000/$300,000

  • Property damage: $100,000

  • Uninsured motorist bodily injury: $100,000/$300,000

  • Medical payments: $5,000

  • Collision deductible: $500

  • Comprehensive deductible: $500

Because cost is a primary reason to choose one insurance carrier over another, it carried the highest weighting among the four categories under consideration.

Pie chart showing how Sound Dollar rates auto insurers
Infogram

How the 10 insurance providers fares across the four categories overall determined their rating. Our best auto insurance recommendation, Geico, scored the highest rating among its class of competitors. Though our other top picks weren’t far behind:

  • Best overall: Geico

  • Best for military families: USAA

  • Best for claims process: State Farm

  • Best for customized coverage: Travelers

  • Best for American Family Insurance: Discounts

  • Best for price transparency: Progressive

  • Best for safe drivers: Nationwide

Renters insurance methodology

To recommend the best renters insurance for Sound Dollar readers, we went through the following process in June 2022.

Choosing providers to review:

To be included in our study, renters insurance companies had to:

  • Be among the 10 largest renters insurance providers in the U.S., we also included two popular online-only renters insurance providers

  • Score an A- or higher with AM Best or Demotech for claims reliability

  • Score above an 800 in overall customer satisfaction in the J.D. Power 2021 U.S. Home Insurance Study

  • Offer a monthly premium at the median rate or below of $14

Performing research

Our list of 12 best renters insurance providers shrunk to five after reviewing their quote process, customer complaints with the National Association of Insurance Commissioners (NAIC), and the cost of a simulated quote.

We judged each company in four main categories:

  • Reliability: Is its AM Best or Demotech grade an A- or better?

  • Cost: Is the sample monthly cost at or below our cutoff of $14? Are there significant discounts available?

  • Coverage: Are deductibles and coverage limits customizable and easy to understand? Are their deductibles, personal property coverage, liability coverage, guest medical coverage, and loss of use coverage competitive? Do they offer additional riders for high-value items?

  • Customer experience: Do they have a high customer satisfaction score with J.D. Power? Do they have lower than usual numbers of complaints with the NAIC? Do they offer a quick and painless quote process? Do they offer multiple ways to file a claim?

How we rated renters insurance providers
Sound Dollar/Infogram

Collecting sample rates

To review cost, coverage, and customer experience, we got simulated quotes from each provider. The quote was based on a mid-30s woman living in an apartment in Chicago with a spouse but no pets. After reviewing all of the above, State Farm rose to the best overall spot, though we chose three other excellent options for specific situations:

  • Best overall: State Farm

  • Editor’s choice: Lemonade

  • Best for military families: USAA

  • Best for loss of use coverage: Allstate

Life insurance methodology

To determine the best life insurance, we compared nearly two dozen providers and used a variety of data points to narrow them down. We analyzed data from third parties such as AM Best, J.D. Power and the National Association of Insurance Commissioners.[4, 5, 6] We also gathered information of our own about the cost, product options and user experience by taking a deep dive into each provider’s website. Ultimately, seven life insurance companies topped our list.

Choosing insurance providers to review

We started with the top 50 biggest life insurance companies available in the U.S. Financial strength was our number one concern, since the big thing with life insurance is the death benefit payout. Affordability and customer service were also major considerations.

Performing research

We collected data points from the most popular insurers, scouring their websites and sample policies. We also spoke with company representatives and focused on affordability, customer satisfaction, personalized service, coverage with no medical exam, policy customization and unique coverage options (because our individual lives and needs can vary greatly).

  • Affordability: With inflation at 40-year highs in the U.S., affordability is becoming key. What kind of premiums are we talking about?

  • Customer satisfaction: Good customer service gets high rewards. Which company gets the best score for treating us well?

  • Personalized service: Sometimes the standard service won’t do. What kind of personalization is available?

  • Coverage with no medical exam: We’re not all in mint condition. Which policies offer optional medical exams?

  • Policy customization: We’re also not all the same. Which companies allow us flexibility to pick the coverage that’s right for us?

  • Unique coverage options: In a similar vein, sometimes we have needs that may be a bit unusual. Which company has unique options that can cater to our diverse needs?

Collecting sample rate quotes

We requested and received quotes from each company for a 20-year term life insurance policy with $500,000 of coverage for a 35-year-old female. The industry average price for this policy is $25.60. Our samples ranged from $20.56 to $32 a month; not a huge difference, but certainly one that builds up over time.

Our best life insurance recommendation, MassMutual, scored the highest rating among its class of competitors. The rest weren’t far behind:

Best overall: MassMutual

Best for affordability: Nationwide

Best for customer satisfaction: State Farm

Best for personalized service: New York Life

Best for coverage with no medical exam: Mutual of Omaha

Best for policy customization: Northwestern Mutual

Best for unique coverage options: Guardian Life

About the Author

Staff editor Andrew Pentis headshot

Andrew Pentis

Andrew Pentis has used his journalism background to write about personal finance topics since 2015. His work has appeared in over 40 publications, including LifeHacker, U.S. News & World Report and Marketwatch.

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