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.

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Thank you,

Ryan H.

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