The AM Best rating system and why it should matter to insurance customers

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 a 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. HiRoad, along with other leading U.S. insurance companies, fits into this category.

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. 

Insurance companies like HiRoad earn 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 with HiRoad’s strong rating, 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.

HiRoad car insurance AM Best rating

We proudly hold an “A” rating from AM Best at HiRoad. 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. 

To know more about our rating and why it matters to you as a customer, please reach out to our team here at HiRoad. 

The information in this article was obtained from various sources not associated with HiRoad®. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. HiRoad is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. HiRoad makes no guarantees of results from use of this information.