Does Financial Strength Matter?
In 2008 over $17 Billion dollars in fire loss was accounted for nationwide. The fires in 2013 that destroyed 511 homes in Black Forest, CO caused a reform in the homeowners insurance laws in Colorado. Hurricane Irma resulted in $100 Billion in damage this year and became the largest in losses recorded. See interactive map of its damage here. Companies must take measures to rebound from their losses.....but who keeps their financial data at the forefront of the consumer's eye? That would be AM Best.
Why an AM Best's Financial Strength Rating Is Important to you?
Three of the most common financial metric categories are: profitability, liquidity, and solvency; the key is to identify the right financial metrics for the business entity.
According to AM Best's website they state the following:
"It is essential that the company you're entrusting to protect your family, business, or your property is financially strong and is able to pay your claims when needed."
The stronger the financial strength rating of an insurance company, the more likely it is that it will not experience financial failure and perhaps even close its doors.
Educating one's self is always a good decision for a consumer to make. The more you know the better you understand when you experience rate increase, non renewal of your policy after a hail claim, underwriting denial of any high risk exposure... and so on.
We encourage you to research your insurance carrier rating. If you have questions, feel free to contact our office for clarification. Happy researching!