What do the letter ratings mean for insurance companies?

Question

i am considering switching from an A company to a B++ company, ratings according to AM Best. is this a good move?

Answer 1

The letter ratings are indicators of the company's economic soundness as rated by independent ratings companies.  A B++ company is reasonably sound, but as a personal rule I only insure with companies that are A or better.  Why take any more risk than necessary that a company can not pay its claims?  And a B company is less likely than a A company of being able to do so, especially in the face of a large number of claims, like a hurricane or other disaster.  The few dollars save on the premium is not worth the extra risk small as it is.

Answer 2

It's just a way to "grade" the insurance companies.

You just want to be sure that the company is ADMITTED in your State - and if it DOES go under, you should be covered by your State's guaranty fund.

Don't expect fast claims service or ANY fast service, for that matter.

In this business.....you GET what you pay for!

Good luck and I hope this helps!

Answer 3

I wouldn't worry about it too much.  It just a rating judging how strong the company is financially.

Answer 4

I agree with the previous responder. If it were a natural disaster that struck, there's a strong possibility a B rated company wouldn't be able to pay all of it's claims and you would be left out in the cold. Although B++ is a "good" rating, it's not as good as an A, A+, or A++. Better safe than sorry.