How to Do a Background Check on Insurance, Savings, and Loan Providers

When you need to make sure the company you’re dealing with is on the up and up, you may have to dig around in their background–just a little bit...
Background Check on Insurance

When you need to make sure the company you’re dealing with is on the up and up, you may have to dig around in their background–just a little bit to ensure everything is above board, or more closely if you feel it’s warranted. Performing a background check can be a simple process or it can be as complex as you need it to be. Following are a few tips on how to do a background check on insurance, savings, and loan providers.

Check Their Reputation

The most logical first step in checking out any company you want to do business with is to get in touch with other businesses or organizations that have had business relationships with the company in question. Ask them about their manner of doing business and whether or not they had any unresolved disputes. Any business’s reputation must be kept pure if they hope to remain in business for long, and there is no better source of information than those with whom they’ve done business previously. Make an appointment to talk to the managers or owners and ask them if that company pays their bills on time and whether or not they have a good credit rating. Find out if any customers have had problems, and how those differences of opinion were resolved. Try and determine how they treat their employees. If a business has repeated contractual issues with their employees, it could affect how they handle your money or how long it takes to resolve an issue. If you have to file an insurance claim, you don’t want to have to wait until a strike or work stoppage is settled before receiving a check.

Get References

You will need to ask the company in question for references, and then contact those people. The questions you’ll need to ask are similar to those you asked of businesses. Do you have any reservations about doing business with that company? How do they treat their employees? Keep in mind that these people have been recommended by the company in question, so you’ll need to weigh carefully the answers they provide, and then decide for yourself it they’re credible.

Check with the Government

If a company is allowed to conduct business in the United States, they are required to adhere to certain rules and regulations established by local and state governments as well as the federal government. Because any government keeps a written history of the people and institutions they govern, there are records available for any legally operated company. A lot of that information is a matter of public record. The first place you should check with is the county clerk where the business is located. Ask for information that is publicly available regarding that company. Find out if they have had any legal issues and whether or not they have litigation pending. If so, find out the extent and type of litigation, but keep in mind that simply because a company is being sued doesn’t necessarily mean they’re guilty of wrongdoing. However, if they’ve been sued more than once you may want to use caution in dealing with them. You can also contact the Chamber of Commerce in the city in which they do business and inquire about their reputation.

Contacting the Better Business Bureau is also an option. You will be able to find out whether or not the company has had any complaints filed against them. You can also run a check through the Secretary of State’s office in the state in which the company is located. You can do this by using the UCC (Uniform Commercial Code) filing system, which will reveal their financial standing in regard to secured loans.

Access to Secure Business Transactions

In addition to accessing the UCC filing system through your state government, you can also find out about a company’s secure business transactions through the United States SEC, the Securities and Exchange Commission–providing they are a publicly held company. If they are, their quarterly and annual reports will be available for public scrutiny, as well as letters from their shareholder’s. In addition there will be quite a bit of other financial information available.

Conduct a Professional Background Check

If you still have questions about the insurance company you’re dealing with, or the place you want to put your money or get a loan from, through the information that is available to the general public, then you could choose to have a professional background check performed. A check of this type will go much deeper, and could take a longer period of time to perform–and it wouldn’t be cheap. But it would be thorough.

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