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Reviews and Best Of terms
Reviews and Best Of in Homeowners Insurance: the news, the names and what changed.
AM Best ratingThe 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.Attorney-in-factThe company that manages a reciprocal exchange for its policyholders under a power of attorney, running underwriting, sales and claims in return for a fee.Captive agentAn agent who sells for a single insurance company or group, usually under an exclusive contract, so every quote comes from that company's products.Demotech ratingA 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.Direct writerAn insurer that sells straight to consumers by website, phone, app or its own employees rather than through independent agents who represent several companies.Financial strength ratingAn 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.Independent agentAn agent or agency appointed by several insurance companies that compares their coverage and prices for a customer and is paid by commission.Insurance brokerA licensed intermediary who places coverage on the buyer's behalf with whichever insurers will take the risk, often including surplus lines markets.InsurtechA company that uses software, data and automation to sell, price or service insurance, as a licensed insurer or as an agency or MGA backed by carriers.Mutual insurance companyAn insurer owned by its policyholders rather than outside shareholders, which can return surplus to them as dividends or keep it to strengthen the company.NAIC complaint indexA 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.Reciprocal exchangeAn unincorporated group of policyholders, called subscribers, who insure one another through an exchange run by a separate manager under a power of attorney.Stock insurance companyAn insurer owned by shareholders who supply its capital and receive its profits, as opposed to one owned by the people it insures.