When you buy insurance, you probably spend more time thinking about your coverage and premium than the financial strength of the company behind your policy. That makes sense. But there is another question worth considering: How financially strong is my insurance company?
That is where an AM Best rating can be helpful.
What Is AM Best?
AM Best is an independent credit rating agency that specializes in the insurance industry. It evaluates insurance companies and provides ratings that reflect its opinion of an insurer’s financial strength and ability to meet its ongoing insurance obligations.
In simpler terms, an AM Best rating gives you another way to evaluate the insurance company standing behind your policy.
AM Best considers factors such as an insurer’s balance sheet strength, operating performance, business profile and approach to risk management.
What Do AM Best Ratings Mean?
AM Best’s Financial Strength Ratings range from A++ (Superior) at the top of the scale to D (Poor), along with additional designations for certain circumstances.
Some of the ratings you may see include:
- A++ or A+: Superior
- A or A-: Excellent
- B++ or B+: Good
- B or B-: Fair
- C++ or C+: Marginal
It is important to understand what these ratings do and do not tell you. An AM Best rating is not a customer service score, and it does not guarantee how a particular claim will be handled or paid. It is an independent opinion about an insurer’s financial strength and ability to meet its ongoing insurance obligations.
Why Does Financial Strength Matter?
Insurance is ultimately a promise. You pay premiums today in exchange for protection if you experience a covered loss in the future. The financial strength of the insurance company making that promise is worth considering.
This can become especially relevant after major events such as hailstorms, wildfires and other severe weather, when insurers may be responding to a significant number of claims at the same time.
For Colorado homeowners and businesses, that hits close to home. We live in a state where costly weather events are a reality, so choosing an insurance company based on price alone may not tell you the whole story.
An AM Best Rating Is One Piece of the Puzzle
A strong financial rating is valuable information, but it is not the only thing that matters when choosing an insurance company.
Coverage, exclusions, deductibles, service, claims practices, price and your individual needs should all be part of the decision. Two insurance companies can have similar financial strength ratings while offering very different policies.
That is why it is important to look beyond a single letter grade.
How Conexus Looks at the Bigger Picture
As an independent insurance agency, Conexus Insurance works with many insurance carriers. Financial strength is one of the factors we consider when evaluating our carrier partners and helping clients determine which options may be a good fit.
We also look at the coverage being offered, policy terms, pricing, service and the specific needs of the person or business we are protecting.
Because at the end of the day, the goal is not simply to find an insurance policy. It is to help you make an informed decision about your coverage and the company standing behind it.
People First. People Protected. Power in Partnership.