Car insurance company ratings are used by banks and investors to determine the stability of an insurance company, and can be used by the consumer for the same purpose. The rating a company receives is based on how the company is doing financially, and how well it could be expected to handle a major catastrophe where many claims had to be settled at once. It is a sign of business health and shows how well a companyâ€™s assets and investments have matured, either for gain or loss.
A company with an AA+ rating is in excellent financial health and is not expected to have any problems settling debts in the near future. Investors know that an AA+ rating is a sound investment and is likely to show a profit on the money, where an insurance company with a C rating is on shaky financial ground and would not make a good investment at this time.
The same is true for car owners. Getting insured with an insurance that is rated in the top of the field means that you can be assured that your coverage will be there for you when you need it. On the other hand, purchasing a policy from a poorly rated company could mean that the company is forced to liquidate assets and your insurance policy could be sold to another company, even one you would rather not do business with.
When shopping for insurance online, always look for a rating made by a reputable ratings firm such as A.M. Best Company, or Standard & Poorâ€™s Index. This rating can tell you at a glance whether the company has had troubling times recently, or seems poised to become the next leader in the financial market. On a personal level, a high insurance company rating means that your car is well protected, and that you wonâ€™t be left hanging if you are unexpectedly forced to make a claim.