Insurance - A M Best Rating

My H/O insurance went from $1824/yr to $3448/yr, so I started shopping around. Since I live in a h.cane prone area of FL, it was hard to even find companies offering it, but I found one for $1,940/yr and another for $1,560/yr. The name of the $1,940/yr co is so generic I couldnt find an A M Best listing, but the $1,560 co was listed as NR-1, which means no rating due to insufficient data. Is it up to the independent agent that locally services the policy to feret out the insolvent companies or is it incumbent upon me?

Most insurance companies are required to pay into a guaranty fund. The companies are assessed a fee (usually a % of premiums) by various states. This money goes into the guaranty fund and is used to pay money to policyholders who are owed money by the insolvent company. So I would do your homework on the company but don't be overly worried about insolvency.

I realize rates are very expensive but be careful of which company you choose. You want a company who will pay your claim if you really need it. :thumbup:

H,

I called the State Insurance Commission and you are right about the guarantee fund and insurers in FL must also meet certain standards, so I feel a little better about going w/ a new non-rated H/O insurance co.

G

Working with an insolvent insurer on a claim is a huge hassle. A claim could take months or even years to settle if the carrier becomes insolvent. I suggest every insurance consumer pay CLOSE attention to the ratings of the insurers they are interested in and make sure they are rated "A- IV" at LEAST.
I would not be comfortable placing my client's insurance with a
NR 1 rated carrier unless I had absolutely had no choice. I realize the cost is important, but will become irrelevent if they go belly up just before or after a major hurricane. Insurance guy.

Ben is right. If the carrier isn't rated be careful. The climate in FL (weather & ins.) is unpredictable right now. You run the risk of placing your business with a company too new to sustain a large scale loss. The gurantee fund may only take care of a small percentage of losses. Another season of large losses in a market like FL could bring about drastic changes in their insurance regulations, laws, etc. that may promt carriers to freeze binding new business in the state.

You could write your policy with a "cheaper" company only to find there may not be enough to pay your claim during a large natural disaster. You may also find it difficult to find a carrier accepting new business after that disaster leaving you without proper insurance, unable to purchase insurance.

Florida has been hit pretty hard recently & I wouldn't take that risk. Insurance companies base their rates on basically the same data. There are ways the rates can be reduced a bit, but watch out for someone that is too cheap. hammylinky is right there.

I think we've answered your title, not your question though! There can be copability for both of you. It is your agents responsibility to do the best thing for you based on WHAT YOU ASK and his/her knowledge. If you ask for the cheapest --nr 1--, if you ask for the most stable -- A++ -- etc. The decision to purchase insurance is ultimately yours. Don't get into a position where you justify spending less money by being able to blame the agent if the carrier goes out of business or can't pay a claim.
You are doing the right thing by becoming an educated consumer.

Research in your area. Talk to several reputable companies about their products, compare them to the cheaper products. You may find that the company that was cheaper has reduced the premium by reducing coverages, or the agent made an error quoting the policy. BE CAREFUL and don't jump at the cheapest policy out there ---- you may get the cheapest policy out there. You get what you pay for in most cases. Find someone that you can trust to give you info locally. A good agent in your area is the best bet to answer pricing and stability questions for you.