What Is an AM Best Rating and Why It Matters in Insurance

At George Park Insurance Agency, we provide access to a wide range of surplus lines markets, giving you more flexibility to find coverage that fits your unique business needs. When you’re shopping for insurance. Whether it’s for your car, home, business, or something more specialized. It’s not just about finding the lowest premium. It’s also about choosing a company that’s financially solid and reliable when it comes time to pay a claim.

What Is Surplus Lines Insurance?

Surplus lines insurance is used when coverage is not available through the standard, or admitted, insurance market. Admitted carriers are licensed by the California Department of Insurance (CDI) and must comply with state regulations, including rate and form approval. They are also part of the state’s guaranty fund, which provides a safety net if the insurer becomes insolvent.

On the other hand, non-admitted carriers, including surplus lines insurers, are not licensed by the CDI, though they are approved to do business in California through licensed surplus lines brokers. Since non-admitted carriers are not backed by the state guaranty fund, policyholders cannot rely on state protection if the company fails. That’s why it’s essential to assess the insurer’s financial stability before placing coverage with them.

The most trusted way to do that is by checking their AM Best rating.

What Is AM Best?

AM Best is a nationally recognized credit rating agency that focuses exclusively on the insurance industry. Established in 1899, AM Best evaluates the financial strength and claims-paying ability of insurance companies around the world.

Unlike other credit rating agencies, AM Best specializes in insurance making its assessments especially relevant when you’re selecting a carrier for your policy.

What Do the Ratings Mean?

AM Best uses a scale from A++ (Superior) to D (Poor) to rate insurers. Here’s a simplified view:

• A++ / A+ – Superior

• A / A- – Excellent

• B++ / B+ – Good

• B / B- – Fair

• C++ / C+ – Marginal

• C / C- – Weak

• D – Poor

A rating in the A range indicates strong financial footing and a reliable ability to pay claims. Lower ratings can be a red flag, especially in the surplus lines space.

Why It Matters in the Surplus Lines Market

Because surplus lines carriers operate outside the standard regulatory framework, evaluating their financial health is even more important. They aren’t subject to the same oversight as admitted insurers, so tools like the AM Best rating help you assess their credibility and strength.

At George Park Insurance Agency, we recognize this responsibility. That’s why we only place coverage with surplus lines carriers that have a minimum AM Best rating of A-. You get the flexibility of non-admitted markets with the confidence of working with financially solid companies.

How to Check an AM Best Rating

It’s easy to verify an insurer’s rating. Just visit AMBEST.com, enter the company name, and view their full financial profile and rating details.

Bottom Line

Surplus lines insurance opens up more coverage options, especially for specialized or hard-to-place risks. But with that flexibility comes the need for careful vetting. An AM Best rating gives you a clear view of an insurer’s financial strength. At George Park Insurance Agency, we help protect your business by working only with carriers rated A- or better, so you get reliable coverage backed by strong financials.

References

1. AM Best Company – Understanding Credit Ratings https://www.ambest.com/ratings

2. California Department of Insurance – What Is a Non-Admitted Insurance Company?https://www.insurance.ca.gov/01-consumers/120-company/07-nonadmitted/

3. California Insurance Code Section 1760-1780 – Surplus Line Brokers and Nonadmitted Carriers https://leginfo.legislature.ca.gov/

4. California Insurance Guarantee Association (CIGA) – What Is Covered?https://www.ciga.org/