When shopping for an insurance policy, the key areas most people tend to focus on is the price and the level of cover the policy provides. However, you should also pay close attention to the companies “Claims Paying Ability Rating” as this provides an insight into the companies financial health. The higher the rating, the healthier the companies financial position.
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By law, all insurance companies must undergo an assessment on an annual basis. There are three agencies that can award the ratings:
- Standard & Poor’s
- A M Best
- Fitch Ratings
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This insurance rating assesses the insurance companies ability to pay out on present and future claims . The ratings are represented by a letter, number and /or symbol.
An insurance companies rating can generally be found in its written disclosure.
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