Florida Homeowners Insurance Company Ratings
I want to talk about the financial stability of the insurance company that you deal with. Historically that has never been a big deal, but in the last 6-8 years, at least, it’s a big deal in the state of Florida. It’s a big deal because with all the hurricanes Florida has had within the last decade or so, insurance companies candidly have gotten scared, and a lot of the everyday financially strong insurance companies have left the state of Florida and there are only a few left standing.The way you can determine the financial stability of an insurance company is through a rating service called A.M. Best. A.M. Best goes through intricate details to determine if an insurance company is financially stable – able to pays its claims, which is why it is important to you as a consumer. The ratings go from A++, just like you are in school – that is as good as you can get, A++, all the way down to E.
You want no part of E, you want no part of D, just like you didn’t in school, but from C down you can think about it. There was a day and a time in our agency when we would not have even considered dealing with a company that was less than an A rated company. However in these times, we have had to make a lot of concessions for the sake of our clients. There is another rating service that has developed called Demotech, and a Demotech rating is determined and used for companies that are 5 years new or less.
You have to be in business at least 5 years to even be considered by A.M. Best. The Demotech ratings are very similar to A.M. Best, but it is a less proven method of a rating service. Never the less, it is there and you need to know it. If you have the opportunity to deal with an A+ or an A rated company, or a more highly rated company that is rated by A.M. Best, choose it! The cost of your policy, obviously is critical to all of us, and I know that is your first consideration, and in order of priority what I think you have to do is, one - as we have talked about, you have to make sure you protect yourself financially. Protect your home and all the assets that go with it. Make the right choices. Then you have to consider the cost of that contract or policy, but equal to that now a days, you need to be sure that the company you deal with is financially stable enough to pay a claim, if you were to have one.
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