Ratings. We seem to rely on them for just about everything. From restaurants and TV shows to hotels and vibrating back massagers, we rarely make consumer decisions nowadays without doing at least some cursory product research beforehand.
Yet somehow, this doesn’t seem to be the case with insurance. Even though insurance providers are rated just like any product, approximately 70% of people do no research at all before they buy. Why is this? What could be more important – and worthy of research – than the insurance being relied upon to protect your home?
Unfortunately, the consequences of such hasty decision-making are real. Today, approximately 64% of U.S. homes are under-insured* and may not be fully repaired if damaged. This is often because consumers do not fully understand how much coverage they require and because insurers don’t properly tailor their policies for a given property. But even when coverage is properly calculated, many homeowners fail to realize that their insurer might lack the financial health to actually pay out claims (even though insurance companies rate you on a scale before taking you on as a customer).
Fortunately, to help consumers get smart about their home (and other types of) insurance, there exist multiple types of rating services which score the financial wellbeing of a prospective insurer. The gold standard for such ratings services is provided by A.M. Best Rating Services.
Over the past 118 years, A.M. Best has graded over 16,000 insurance companies worldwide, including sellers of homeowners, health, auto and other insurance products. Providing such a service is non-trivial and involves a rigorous methodology that looks at both qualitative and quantitative data, in order to scores an insurer’s ability to fulfill financial obligations.
And they’ve done this work well. So well in fact that A.M. Best themselves have received the type of awards & accolades they bestow on top insurers. Even as other ratings services have popped up, A.M. Best has been crowned as “Best Rating Agency” by Intelligent Insurer, “Best Rating Agency” by Reactions Awards, “Best Global Rating Agency” by Reactions Gold, and “International Best Rating Agency” by International Takaful Awards. The list goes on.
In fact, A.M. Best ratings have become trusted that today, many financial institutions will not do business with an insurer if it’s not A.M. Best rated. For example, while property lenders require a homeowner to obtain insurance in order to close a mortgage or property loan, many such lenders will not accept an insurance policy unless it comes from an insurer with B+ or higher A.M. Best Rating.
In fact…many financial institutions will not do business with an insurer if it’s not A.M. Best rated
So why does any of this matter?
Today, the work being done by A.M. Best could hardly be more important. With the advent of #insurtech, a wave of feisty young startups have set up shop to evolve outdated insurance processes while eliminating time, cost, and hassles. This disruption promises to benefit consumers in wonderful ways over the long run. But in the short run, it introduces risk, as customers are forced to figure out which of these upstarts can be entrusted with the protection of their homes.
Thus, in the exciting new age of insurance startups, A.M. Best Ratings have become an essential tool for determining whether a promising company is financially equipped to fulfill on the coverage it sells.
At Hippo, we care deeply about these insurance ratings. We may have invented a 60-second quote process, and better, more protective home insurance policy, but what good is it if our customers can’t trust our coverage? Thus, we’ve decided as a company to partner exclusively with insurance companies that hold a high A.M. Best Rating (A- “excellent”or higher). Only in this way can we provide customers with the complete peace of mind they deserve – the knowledge that their home insurance is backed by companies with the strongest financial health.
This policy, coupled with Hippo’s smarter, innovative coverage, ensures that your home and contents are not only protected, but that you’re protected by the best, and with the financial backing to honor the coverage we sell! With Hippo, your covered losses will be paid, and you will be treated well, period.
(If you’re interested in visiting A.M. Best Rating Services’ website, you can do so by clicking the link below. Consumers can easily create an account and we encourage you to look up any prospective insurance company you’re thinking about doing business with.) http://www.ambest.com/home/default.aspx
For reference, A.M. Best’s financial strength rating system ranges from:
A++ (Superior) to B+(Good)
B (Fair) to D (Poor)
And you’ll find a few other ratings there as well:
E (Under Regulatory Supervision)
F (In Liquidation)
S (Rating Suspended)
NR (Not Rated)
*Reference: 2015 survey by Marshall & Swift/Boeckh
