⚠️ Why Financial Strength Matters
Insurance companies can (and do) go bankrupt. When that happens, your claims may go unpaid or you'll wait years for reduced payments from state guaranty funds. Before you buy, check the rating.
Understanding AM Best Ratings
AM Best is the most widely used rating agency for insurance. Here's what the grades mean:
| Rating | Meaning | Should You Buy? |
|---|---|---|
| A++, A+ | Superior | ✓ Yes |
| A, A- | Excellent | ✓ Yes |
| B++, B+ | Good | ⚠️ Proceed carefully |
| B, B- | Fair | ⚠️ Risky |
| C++, C+, C, C- | Marginal | ❌ Avoid |
| D, E, F, S | Weak/Under regulatory action | ❌ Avoid |
Major Insurer Ratings
A++ (Superior)
- • State Farm
- • USAA
- • New York Life
- • Northwestern Mutual
- • MassMutual
A+ (Superior)
- • GEICO (Berkshire)
- • Allstate
- • Progressive
- • Mutual of Omaha
- • Amica
A (Excellent)
- • Farmers
- • Nationwide
- • Liberty Mutual
- • Transamerica
A- (Excellent)
- • Lemonade (backed by reinsurers)
- • Various regional carriers
How to Check Ratings
AM Best (Free)
Visit ambest.com - Create free account for basic ratings
Your State Insurance Department
Most state regulators publish insurer financial data and any regulatory actions
Ask Your Agent
Request written proof of AM Best rating before buying any policy
The Bottom Line
Only buy insurance from companies rated A- or higher by AM Best. Lower-rated insurers may offer cheaper premiums, but the risk of them not paying claims isn't worth it. Major carriers like State Farm, USAA, GEICO, and Progressive all have excellent ratings.
Check Any Company's Rating →