AM Best Rating

A letter grade (A++ down to D) measuring an insurer’s financial strength and ability to pay claims. Higher is steadier.

An AM Best rating is a letter grade — from A++ (Superior) at the top down through B, C, and D — that measures an insurance company’s financial strength: its ability to keep paying claims, including years from now. AM Best is the oldest and most widely used of the insurer rating agencies, and its scale is the one most lenders, agents, and contract requirements point to.

It matters because insurance is a promise to pay later, sometimes decades later on a long-tail liability claim. A cheap policy from a weak or unrated carrier is a false economy if that carrier can’t pay when you have a large loss. Many mortgage lenders and commercial contracts explicitly require coverage from a carrier rated “A-” (Excellent) or better for exactly this reason, and a downgrade can force you to re-place coverage mid-term.

Read the letter grade together with the outlook (stable, positive, or negative) and don’t confuse the financial-strength rating with size or price — a small, highly-rated regional carrier can be a safer home for your policy than a large, weakly-rated one. As an independent agency we watch carrier ratings and steer clients toward financially sound markets; if a rating slips, that’s a reason to review your options, and we’ll flag it.

This is a friendly general explanation, not legal or policy language. Exact coverage depends on your policy, carrier, and state. 🤝

Written and reviewed by the We Insure Things team — licensed independent insurance agents. Last reviewed July 23, 2026. Questions? Ask a licensed agent.