Understanding NAIC Company Codes

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With so many different automobile insurance carriers doing business in the United States, regulators found it important to not only have state regulations for tracking carriers but national regulations as well. As such, the NAIC was formed in order to regulate insurance carriers and monitor their behaviors as they began spreading from state to state.

What exactly is the NAIC?

The NAIC, or the National Association of Insurance Commissioners, is a group of elected or appointed government officials, usually one representing each state, that gathered together to protect the interests of the public as a whole when it comes to insurance regulation. The insurance commissioner from each state sits on the board of the NAIC and they all work together to protect public interest, ensure that insurance markets remain fair and competitive, and to ensure all of the insurance companies in operation are financially solvent.

NAIC Insurance Company Codes

One of the ways the NAIC regulates insurance carriers is by assigning an auto insurance code. These codes are often listed on your auto insurance policy or identification card, either along with or in place of a state assigned code. These codes tell officials exactly what insurance company is responsible for issuing the insurance policy for the driver presenting the identification card.

NAIC Codes vs. State Codes

You'll find that many insurance companies have both state and national codes assigned to them. Not every insurance company is required to apply for an NAIC code but having one makes a company easily identifiable if a driver is in an accident in another state. NAIC auto insurance codes are usually 5 digits while state codes are, in most cases, only 3 digits.

Take, for example, auto insurance code 903. In the state of New Jersey, this code represents Travelers Insurance Company. There are several different NAIC codes for Travelers. In this example we'll look at the code for Travelers Personal Security Ins Co, which has a code of 36145. The numbers are very different but both point back to the same parent company.

You don't need to know the auto insurance codes for the insurance carriers you're doing business with when you're collecting quotes but if you purchase insurance from one you may want to make sure you are able to identify who you are really doing business with. Check your automobile insurance identification card to make sure a code is listed – and look it up! You'll be surprised at the valuable information you're able to find!

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