What grade is your insurance company receiving?

It is no secret that when you go to buy car, life, home, or other insurance the insurance company is going to ask you a lot of questions. Why? They want to know what kind of risk you are. Knowing the amount of risk you represent helps them first determine if they want to insure you, and secondly, what price to charge you for the insurance. However, have you thought that you should also be assessing your risk in buying insurance from a particular company?

Insurance companies are given ratings that represent their financial stability. It is unsafe to assume that any insurance company that is in business is stable. There are tools online that allow you to see any insurance company's risk rating for free. Insurance companies are assigned letter grades from AAA to R (Standard and Poor ratings). The letter grades and their meanings are listed below.

AAA : EXTREMELY STRONG
AA : VERY STRONG
A : STRONG
BBB : GOOD
BB : MARGINAL
B : WEAK
CCC : VERY WEAK
CC : EXTREMELY WEAK
R : UNDER REGULATORY SUPERVISION

Factors taken into consideration when assigning an insurance company grade by the ratings agencies are:  recent performance, financial statements, leverage, and the stability of their management. The agencies may also consider the company's competition, market presence, and diversification of their investments and assets. These are all great areas to critique and grade, but as a consumer you should also be comfortable with how you are treated and responded to. Does the agent take an interest in answering your questions and helping your understand all options available to you or do you feel like you are receiving a sales pitch?

Managing the risks you face is an important part of preventing financial loss and maintaining your ideal standard of living. Appropriate insurance through a reputable company that will be there when you need it is one tool in managing those risks. Be sure you check out your insurance company as thoroughly as they will check up on you!

Other articles you may be interested in:
-Is damage from a pothole covered by my car insurance? Yes, but........
-Explaining pet insurance.
-What to do before a car accident.
-Should you buy flood insurance now?
-How to "wreck" your auto insurance claim.

 
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