One thing that we all want to know is that the insurance company will be there if and when we have a loss. We have seen companies go bankrupt and while there may be some recourse if this happens, a good precautionary step whenever possible, is to select a company that has a good rating. This will help to minimize the chance of choosing a company that goes sour.
Become familiar with A.M. Best and similar rating companies.
A.M. Best is a US-based rating company that focuses on the insurance industry. They are a Nationally Recognized statistical Rating Organization that focuses exclusively on the insurance marketplace. They issue financial-strength ratings which measure insurance companies’ ability to pay claims.
The company reviews the balance sheet, operating performance, management issues and profile of insurance companies and issues a rating based on their findings. While their rating is no guarantee of the future it does provide a basis of comparison for us as we shop for Auto Insurance, Home Insurance, Commercial Insurance and/or Business Insurance and other types of insurance policies.
Their rating system looks something like this:
- A++, A+ (Superior)
- A, A- (Excellent)
- B++, B+ (Good)
- B, B- (Fair)
- C++, C+ (Marginal)
- C, C- (Weak)
- D (Poor)
- E (Under Regulatory Supervision)
- S (Rating Suspended
They also provide categories for the financial size of a company.
I suggest when shopping for insurance to ask your agent for the A.M. best rating and financial size of any company they are proposing or visit A.M. best www.ambest.com yourself and type in the carriers name and do some research.
While this does not give you any guarantees it does provide you with relevant information to assist when obtaining insurance.
*** For home insurance in Florida – Most of the companies writing Homeowners Insurance in Florida are domiciled in Florida and very few of these companies are eligible for an AM Best rating. The main rating company to research for Florida based companies is a company named Demotech. You can search for a rating here: www.demotech.com