When shopping your insurance you may hear your agent talk about a provider’s “A.M. Best Rating”. And while this is a familiar term to the average insurance professional, consumers may be left wondering, “What does an A.M. Best Rating mean to me?” Well, good question!
The answer is, your insurance company’s A.M. Best Rating should be mean a lot to you and here’s why: A.M. Best Company is the most widely known full service credit rating organization in the financial services industry today. That’s right, they don’t only rate insurance companies, but banking institutions as well as hospitals and health care systems.
What are their ratings based on?
A.M. Best analyzes a company’s financial reports in order to establish a financial strength rating for each insurance company that participates in their rating program. This tells you, the consumer, how strong your insurance company is from a financial standpoint so that you know whether they should be able to fulfill their financial obligation to you in the event of a claim. It also gives you a benchmark to compare companies side-by-side if you are weighing out policies between multiple carriers, for example. Companies can be rated anywhere from A++ (superior) to D (poor).
For more information about how A.M. Best Ratings work, visit the A.M. Best Consumer Insurance Center. You can use this tool also to easily search for insurer ratings.
Shopping Tip:When getting insurance quotes, be sure to ask your agent about the A.M. Best Rating of the company they are recommending.
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