Know Your Insurance Carrier’s Financial Rating

Often overlooked during an insurance purchase is a carriers financial rating.  It is important to at least know what the financial rating of your insurance carrier is.  AM Best is a widely used credit rating organization specializing in the financial and insurance sector.

The AM Best system is an easy way for non-insurance folk to understand the quality of an insurance carrier’s financial stability.

Most carriers you are going to find at the retail level will have AM Best ratings of A- or better.  Occasionally you will find a carrier with a B+ or B++ rating.  For the average personal home and auto purchase you have nothing to worry about if your carrier is rated B+ or better.  Follow the link (Click Here) and check out the rating for your current insurance carrier.

How did your carrier do?

A- to A++ is a quality rating, meaning AM Best deems the insurance carrier financially secure to meet all loss obligations.  Good news for you and your carrier.

B+, B++ is a good rating, still considered secure by AM Best.  You may want to check the AM Best website from time to time to make sure the rating stays strong.

B or below is a poor rating.  If you have an insurance policy with a carrier rated B or below it would be prudent to contact your insurance broker and inquire about other options.

Don’t go crazy with the financial rating of an insurance carrier.  On a personal and small business level you should base a buying decision on A- versus A+ financial rating.  Far more important to the personal and small business insurance consumer is a carrier’s Claims Rating (discussed in future posting).  However, in tumultuous economic times it is wise to understand the financial rating of your carrier.

Disclaimer:

This article is for informational purposely only. There is no legal advice being suggested or proffered and the author assumes no responsibility or liability for the actions take or not taken by the readers based upon such information.

Thank you,

Ryan H.

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