Home insurance ratings can really mean only one of two different things:
A) The financial strength rating of a homeowners insurance company given by an independent rating agency or,
B) The overall ranking and reviews of a given insurer as compared to other competing insurance providers. Let’s take a look at each of these different things because understanding some of the criteria for ranking home insurance companies could very well end up saving you quite a bit of money on your policy. We have many more Home Insurance Help Articles Now Available.
Financial Strength Ratings
Evaluating an insurance company based on its financial strength is similar in nature to what an independent auditor will do when it takes a look at a company’s books and labels the company as being financially sound and able to pay off all of its debts (and in the case of insurance companies able to pay out claims to policyholders) or labels the company as potentially being unable to pay off its creditors.
Companies like AM Best are known for being a trusted third part company that will levy home insurance ratings for many if not all of the homeowners insurance companies in the United States. Ratings from AM Best range from A++ (Superior) to B+ (Good) within the “Secure” category and from B (Fair) all the way down to S (Rating Suspended) in the “Vulnerable” category.
Obviously, if you come across a company that is rated B or below then you are taking a great risk because of their ranking being placed squarely in the “Vulnerable” category. Stick with companies that have the AM Best mark of B+ (Good) or higher.
Reviews and Rankings
There is no one company or 3rd party that provides reviews and rankings of insurance companies although there are certainly different places to turn to for home insurance reviews. The important thing to remember is that pretty much every company if it is large enough is bound to have some bad reviews but pay close attention to the aggregate rankings and reviews by customers to see if they sound like a company that you want to trust with protecting your home.
Additional places to find independent ratings include:
- JD Power
- Consumer Affairs
- NAIC (National Association of Insurance Commissioners)
- Your State Department of Insurance
- Personal Finance Magazines like Fortune, Forbes, and Money
In a nutshell, ratings/reviews can come in 2 different forms: the assessment of the financial strength of a company by an independent company like AM Best or a more informal review of the company as a whole by customers, companies, and regulatory authorities. We have many more Home Insurance Help Articles Now Available.