Glossary

AM Best rating

The letter grade, from A++ to D, that the insurance rating agency AM Best assigns to an insurer's ability to meet its ongoing policy obligations.

Also called: Best's rating, AM Best financial strength rating, A.M. Best rating, Best's Financial Strength Rating, FSR

AM Best is a credit rating agency that specializes in insurance. Its Financial Strength Rating is its opinion of an insurer's ability to meet ongoing obligations, which is to say pay claims. The scale has two bands. The Secure band is A++ and A+ (Superior), A and A- (Excellent), and B++ and B+ (Good). The Vulnerable band is B and B- (Fair), C++ and C+ (Marginal), C and C- (Weak), and D (Poor). Separate designations mark companies under regulatory supervision (E), in liquidation (F) or suspended (S).

AM Best bases the grade on balance sheet strength, operating performance, business profile and enterprise risk management. For a home insurer, catastrophe exposure and reinsurance weigh heavily. Each rating carries an outlook, stable, positive or negative, and can be placed under review. Always pair a grade with its date, because a rating from two years ago may no longer stand.

Ratings apply to the specific company or pooled group named, so confirm the one on your declarations page. Many insurers, including numerous regional and Florida carriers, are rated by Demotech instead of or in addition to AM Best, and the scales are not interchangeable. A strong grade says nothing about price, service or claims handling. Look up the current letter at AMBest.com, then see Financial strength ratings: AM Best, S&P, Moody's and Demotech and Demotech ratings and Florida's insurers.

Last reviewed October 10, 2026

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Related terms

Financial strength rating An independent agency's grade of an insurer's ability to meet its obligations and pay claims, issued by firms such as AM Best, S&P, Moody's, Fitch and Demotech. Demotech rating A financial strength grade from an independent firm that rates mostly small and regional property insurers, often those AM Best and S&P do not cover. Policyholder surplus An insurer's assets minus its liabilities under statutory accounting, the capital cushion that absorbs losses beyond its reserves and premiums. Insolvency The condition of an insurer that cannot pay its claims and debts as they come due, or whose liabilities exceed its assets or required capital. Guaranty fund A state safety net, financed by charges on licensed insurers, that pays covered claims up to a cap when an insurer is declared insolvent. NAIC complaint index A ratio comparing an insurer's share of confirmed consumer complaints with its share of premium, where 1.00 means complaints in line with its size.

Related guides

The California Earthquake Authority explained What the CEA is, how its policies are sold through your home insurer, what they cover and exclude, how it is funded, and what its limits mean for homeowners. Demotech ratings and Florida's insurers Why most Florida home insurers carry Demotech ratings, what an A (Exceptional) means, how lenders treat it, the 2022 downgrades and the criticism. Financial strength ratings: AM Best, S&P, Moody's and Demotech What insurer financial strength ratings measure, how the AM Best, S&P, Moody's, Fitch, KBRA and Demotech scales differ, and how to check yours. How to buy homeowners insurance, step by step Price the rebuild, gather the facts insurers ask for, get matching quotes, vet the company, read the draft declarations page and bind coverage before closing. How to research a home insurer in 15 minutes A step-by-step check of any home insurer before you buy: who issues the policy, its rating, complaints, claims record and license, and what each result means.

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Allstate The No. 2 U.S. home insurer, a public company sold by Allstate agents and online, with National General for independent agents and Castle Key in Florida. Amica Mutual Insurance Rhode Island mutual founded in 1907 that sells home, condo and renters insurance directly, with no agents; first in J.D. Power's 2025 and 2026 home studies. Benchmark Insurance Company Trean-owned fronting carrier in Wayzata, Minnesota whose homeowners premium comes mostly from Texas policies it issues for the Swyfft homeowners program. Berkshire Hathaway GUARD Berkshire Hathaway's Wilkes-Barre small-business insurer, which sold homeowners policies through agents from 2018 and has been leaving the line since 2024. DB Insurance (U.S. Branch) U.S. branch of South Korea's DB Insurance, writing homeowners in California through the Aegis General program, plus Hawaii, New York, New Jersey and Guam. Georgia Farm Bureau Insurance Macon-based mutual that sells home, farm and auto insurance only in Georgia, to Farm Bureau members, through agents in 158 of the state's 159 counties.

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