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How Do I Evaluate an Insurance Company I've Never Heard Of?
You are not supposed to know every carrier in Texas. You are supposed to be able to check one, and tonight you can.
The answer
Five questions, each with a free public answer. Is it licensed in Texas, and who stands behind it if it fails. How big is its Texas book. What is its rating, and who gave it. What has it filed with TDI, and when. What is its story, in its own words. Twenty minutes answers all five, and if the agent cannot walk you through whatever is left, trust your gut and walk. A name you have never heard of is a company you have not read yet.
The five questions
Every one is answered by a public source, for free, from the kitchen table. Open the quote, open a laptop, and go in order.
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TDI
Is it licensed here, and who stands behind it?
TDI's license search covers companies as well as agents. A licensed carrier belongs to the Texas guaranty association, which pays covered claims if it fails, up to policy limits or 300,000 dollars per claim. A company that is not licensed may still be eligible as surplus lines, which TDI's Help Line at 800-252-3439 confirms, and its policy says so on its face.
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Size
How big is its Texas book?
TDI's complaint data lists every company's policies in force by line, with its complaint index beside the count, the company's share of confirmed complaints divided by its share of policies in force. The average is 1.00. Thousands of policies against millions is the difference between a price built on a few years of data and one built on decades.
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Rating
What is its rating, and who gave it?
AM Best grades how well a carrier can meet its obligations, on a letter scale. Demotech rates many carriers on a scale of its own. Read the band, then the trend, and note which firm gave it.
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Filings
What has it filed with TDI, and when?
The rate filings lookup reads TDI's data live, every rate change the company asked for and when it reaches renewals. HelpInsure, run by the state, compares sample rates and policies and shows a company's financial rating and complaint index in one place.
- 05
Its story
What is its story?
Open the carrier's own website. When it says it was founded, what it was founded from, and why. A carrier that writes better business can tell you how, in its own words.
Twenty minutes turns a stranger into a company you can read.
What a Texas record looks like
Time in Texas is a list of storms, priced, paid, and renewed through. Ask when the company started writing here, then count what it has been through since. A carrier that has paid through all four of these and still renews on the coast has shown you something no rating can. A Texas record is the list of storms a carrier has already paid through.
Why a price can be half
It is rarely the carrier alone that worries us. It is the carrier, the contract, and the location together. One quote at half of every other, a contract with new limits in it, a company new to Texas, placed as surplus lines, on a house that faces the coast or the hail belt. That stack is the whole cost of the risk, and sometimes the rate is low because the carrier miscalculated your coverage. Carriers writing the same street should land near each other on price.
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Millions of policies
- The price is built on
- Decades of losses on houses like yours
- A bad season is
- Absorbed
- A price far below the others usually means
- It wrote the right houses and had fewer losses
- What it comes down to
- Priced on data
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Thousands of policies
- The price is built on
- A few years of data and a bet
- A bad season is
- A test
- A price far below the others usually means
- It miscalculated your coverage
- What it comes down to
- Priced on a bet
A carrier without a proprietary way of writing better business has two ways to be cheap. It can bet the claim never comes, or it can write a contract that pays out less. Some people want the second. It is not what we call insurance. A policy should pay for the sudden and the accidental, and a carrier owes the people it serves that promise on the worst day of their lives. A good carrier looks for the way the contract pays.
The rating, graded
AM Best rates how well a carrier can meet its obligations, in its opinion, on a letter scale. The top four bands are where we want a Texas home or auto policy to live. Below them the scale runs Marginal, Weak, and Poor, and then two designations that are not ratings at all, E for a company under court-ordered conservation and F for a company in liquidation. A rating grades the balance sheet. The contract still decides the claim.
The quiet signals
Some signals never show up in a rating. A carrier fresh into Texas has no record here yet, and a record is the thing you are trying to read. A claims line that rings to a third party means the adjuster who meets you on the worst day may be meeting the policy for the first time. And the best outcome for a small carrier that does everything right for twenty years is to be bought by a bigger one. New to Texas is a reason to wait, never a reason to rush.
When these stack up, walk
- The company is new to Texas this year or last.
- The quote is half of every other quote you hold.
- The contract carries limits the other quotes do not.
- The policy carries the surplus lines notice and nobody mentioned it.
- The house faces the coast, the hail belt, or a flood zone.
- The agent cannot say whether the company's own people or a third party will adjust the claim.
The one question to ask out loud
Ratings and indexes are public. The answer to this one is not, and it decides more of your worst day than either. Ask it before you bind, and listen for a name.
When I file a claim, does the company send its own people, or a third party?
A carrier that keeps its own claims team can say so in one sentence. A carrier that cannot will tell you about its partners. The adjuster who meets you on the worst day is the carrier, as far as you will ever see it.
What happens when you send it
You want one thing from this page. To know whether the company on the quote will be there on the worst day, and to be sure before you bind. Here is the whole path.
- 01
Free
Send it
The quote and the declarations page, and the name of the company exactly as it appears.
- 02
On our desk
We run the five, and a sixth
The five public answers, and then the one that is not public. What the carrier has been through in Texas, how its financials read to the national network that vets ours, and who shows up when a client of ours files a claim.
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Your call
You get one of three answers
It holds, bind it. It holds with a condition, bind it with your eyes open. It does not hold, stay where you are. If the lowest price in the stack comes from a carrier below our standard, you still see it, with our reason beside it. About 40 percent of the time we tell homeowners to stay with their current carrier, and sometimes even with their current agent, because that is the right answer for the family.
You do the reading. We add the years.
An advisor does not bet on long shots
I am an insurance advisor. I do not run a book on long shots, and I do not bet a family's home on a carrier and a contract nobody can read. When a carrier we can reach sits below the standard I hold, I still show you its price, and I say in the same breath that I would not put my own family on it. My grandpa used to say trust your gut. If after twenty minutes something about the carrier does not add up, the price does not sit right beside the others, and the agent cannot walk you through the differences, that is your protection. If it is too wrong and too unexplainable, trust your gut and walk.
Charles McDade, LUTCF
Questions readers ask
Is an insurance company I've never heard of legitimate?
Often, yes. Texas licenses far more carriers than most people can name. Legitimate means licensed here or eligible as surplus lines, carrying a rating you can read, and on TDI's records with a policy count and a complaint history. Twenty minutes with the five questions settles it.
How do I check if an insurance company is licensed in Texas?
TDI's license search covers companies as well as agents, and TDI's company profiles carry the complaint record, the history, and any enforcement actions. If the company is not licensed, TDI's Help Line at 800-252-3439 can tell you whether it is eligible to sell surplus lines here.
What is a good AM Best rating for home insurance?
The top four bands, Superior, Excellent, Good, and Fair, run from A++ down to B-. Read the band, then the trend, because a rating that moved down last year says more than the letter. The rating grades the balance sheet. It says nothing about the contract, the sublimits, or who adjusts the claim.
Will you show me the cheapest company even if you would not recommend it?
Yes. If the lowest price in the stack comes from a carrier below the standard we hold, you see it, with our reason beside it. You deserve to know the price exists, and you deserve to hear why we would not put our own family on it.
Is the state's policy comparison tool still available?
The Office of Public Insurance Counsel is still open. Its Policy Comparison Tool is being redesigned, with no timeframe as of August 2026. In the meantime HelpInsure compares sample rates and policies and shows a company's financial rating and complaint index, and TDI's approved policy forms are public on SERFF.
Should I buy from a company that is new to Texas?
New to Texas means no record here yet, and the record is what you are trying to read. We wait. A carrier that is excellent in another state can earn a Texas record in a few renewals, and the quote will still be there when it has.
Sources worth opening before you decide
- TDI prioritizes transparency by making home and auto data public, Texas Department of Insurance, June 22, 2026
- Company profiles and license search, Texas Department of Insurance
- Complaint indexes and policy counts for insurance companies, Texas Department of Insurance, updated October 10, 2026
- HelpInsure, the state's comparison site
- Policy Comparison Tool, Office of Public Insurance Counsel, updated August 24, 2026
- Guide to Best's Financial Strength Ratings, AM Best, version 121719
- Demotech, opened October 15, 2026
- Frequently asked questions, Texas Property and Casualty Insurance Guaranty Association
- Hurricane Harvey claims data call, Bulletin B-0034-17, Texas Department of Insurance, September 21, 2017
- Does insurance cover water damage caused by burst pipes?, Texas Department of Insurance, on Winter Storm Uri
- Hurricane Beryl insurance help, Texas Department of Insurance, July 8, 2024
The purpose is to help the reader ask better questions before claim time.
Know who is really behind your policy
A name you do not know is a question, and questions have answers. We find them with you.
Send the quote and the name of the company. A licensed Texas agent runs the five public checks, adds what the carrier has been through in Texas and who shows up on its claims, and tells you plainly whether it holds, client or not. We translate the contract before you sign for another year.
The audit is free. The decision is yours. No broker fees for personal lines clients.