Glossary

AM Best rating

A letter grade from rating agency AM Best on an insurer's ability to pay claims, running from A++ (Superior) down to D (Poor).

Also called: A.M. Best rating, financial strength rating, FSR

An AM Best rating is the rating agency's opinion of an insurance company's financial strength, meaning its ability to pay claims and meet its other policy obligations. AM Best specializes in the insurance industry, and its financial strength ratings are the ones most often quoted in insurer marketing and on comparison sites.

The scale runs A++ and A+ (Superior), A and A- (Excellent), B++ and B+ (Good), B and B- (Fair), C++ and C+ (Marginal), C and C- (Weak), and D (Poor). E means the insurer is under regulatory supervision and F means it is in liquidation. AM Best bases ratings on balance sheet strength, operating performance, business profile and enterprise risk management, and you can look ratings up on its website.

A rating says nothing about price or claim service. A top-rated insurer can still have a high NAIC complaint index, and a smaller company rated A- is still considered financially sound. Ratings change, so note the date you checked. Because auto claims settle relatively quickly, financial strength matters less for a car policy than for life insurance, but a failed insurer leaves policyholders relying on a state guaranty fund for open claims. See AM Best financial strength ratings explained.

Last reviewed October 4, 2026

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Related terms

Guaranty fund A state safety net, funded by assessments on other insurers, that pays covered claims when a licensed insurance company goes insolvent. NAIC complaint index A score comparing an insurer's share of consumer complaints with its share of premiums; 1.00 is the national baseline and lower is better. Admitted insurer An insurance company licensed by a state's insurance department, which regulates its rates and forms and backs its claims through the state guaranty fund. Reinsurance Coverage that insurance companies buy to pass part of their risk to another company, helping them pay large or clustered losses. Combined ratio A measure of insurer underwriting profit: claims and expenses as a percentage of premium, where under 100 means a profit and over 100 a loss.

Related guides

AAA car insurance: how the clubs and their insurers work AAA car insurance comes from different insurers depending on your regional club. Which group serves your area, the membership rule and how to compare. AM Best financial strength ratings explained What AM Best's A++ to D financial strength ratings mean, how to look one up for free, and how to use a rating when choosing a car insurer. Farm Bureau insurance: membership, eligibility and how it works How Farm Bureau car insurance works: the link between state Farm Bureau federations and their insurers, membership dues, who can join, and how to compare it. How to choose a car insurance company A practical way to choose a car insurer: shortlist on price for identical coverage, then compare financial strength, complaints and claims service. How to research a car insurance company before you buy A step-by-step checklist for vetting a car insurer: confirm its license, check its financial strength and complaint record, and see how it handles claims. J.D. Power auto insurance studies explained What J.D. Power's auto insurance, claims and shopping studies measure, how scores work, recent results, and how to use the rankings alongside other data.

Related insurers

Southern Farm Bureau Casualty The Mississippi-based insurer behind Farm Bureau auto policies in Arkansas, Colorado, Florida, Louisiana, Mississippi and South Carolina. Farm Bureau Insurance of Tennessee Tennessee-only Farm Bureau insurer, founded by farmers in 1948, selling auto, home and life cover through local agents; rated A+ by AM Best.

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