Let’s say you’re shopping online for car insurance, and you see a mention on the insurance company’s website that says: “A rated by AM Best.” Well that sounds good, you think…but what exactly does it mean?
Is it some official institution, or is it just another user-review site? Well, we’re here to break down why an AM Best rating is relevant for you as an insurance customer.
What is an AM Best rating?
Founded in 1899 by a guy named Alfred M. Best, AM Best rates over 3K insurance companies in 90 countries on their financial strength. Recognized by the government as an official rating organization, the company is like a report card for an insurance company. (There are other companies out there that rate financial institutions, but AM Best is the only one that looks exclusively at insurance companies).
So when you’re looking at an insurance company’s website, here are the different ratings you might see, and what they mean for you as a potential customer:
- Superior: A+
- Excellent: A
- Good: B+
An AM Best rating of A+ to B+ indicates that the insurance company is financially “secure.” This means that there is less of a chance of the company going bankrupt or out of business; they should have the ability to pay for claims
In addition to a letter grade, the rating may also include an added “+” or “-” tacked on. These are rating notices that are used to show an insurer’s strengths or weaknesses within its assigned category.
It is important to choose an insurance carrier that earns an excellent AM Best rating by being financially secure.
On the flip side, the following ratings are for companies that AM Best thinks are more vulnerable:
- Fair: B
- Marginal: C+
- Weak: C
- Poor: D
You may want to tread carefully with companies that have these ratings, as they may be unable to cover customers’ losses. But because ALL the carriers at that the Bremberger Insurance agency offer strong ratings, you can be confident that we’ll be there for you in case the unexpected happens.
Why should I care about AM Best ratings?
As we mentioned, knowing your car insurance company’s AM Best ratings can provide invaluable insight into their financial stability and ability to handle customer insurance claims and meet its financial obligations.
Customers, like you, who have an insurer with a higher rating may have a greater confidence that in times of unexpected moments or economic hardships that your insurer can fulfill its promises.
Additionally, AM Best ratings can have a big impact on customer satisfaction and policy value. With a higher rating, insurers are better equipped to handle claims and pay their policyholders much more quickly—resulting in a smoother experience for customers.
As a customer, understanding how an AM Best rating can impact your experience can help you make a well-informed decision when selecting car insurance.
We proudly represent over 15 carriers with an AM Best rating, And we know that doesn’t come lightly. Our team is dedicated to our customers and ensuring that when those unexpected moments happen, that you—with the right coverages—know you’ll be helped during the claims process.
Jim Bremberger has worked in the insurance industry since 2009, gaining extensive experience with minor and significant claims that can significantly impact a family without adequate coverage. By joining the independent sector and teaming up with many insurance carriers, he can offer exceptional coverage at competitive rates for residents all over Wisconsin.