Also known as: AM Best Rating · Best Rating
A letter grade indicating an insurance carrier's financial strength and ability to pay claims.
AM Best is the leading rating agency for insurance companies. Their financial strength ratings range from A++ (Superior) to F (In Liquidation). Contracts in regulated industries, large enterprises, and government procurement routinely require carriers rated A- (Excellent) or better, with a financial size category of VII or higher. Admitted carriers with strong AM Best ratings also carry an additional layer of protection: if the carrier were to become insolvent, the state insurance guaranty association (e.g., CIGA in California) may cover outstanding claims up to statutory limits — a backstop that non-admitted carriers do not provide.
An AM Best rating of A- or higher is considered "good" and is the threshold that regulated-industry, large-enterprise, and government contracts typically require. The full scale runs A++ and A+ (Superior), A and A- (Excellent), B++ and B+ (Good), then down through vulnerable categories. A- (Excellent) or better with a financial size category of VII or higher is the standard minimum for enterprise procurement and government work.
An A- rating falls in AM Best's "Excellent" category and indicates the carrier has a strong ability to meet its ongoing insurance obligations and pay claims. It sits just below the "Superior" tier (A++/A+). A- is widely accepted as the minimum acceptable rating in vendor and lender insurance requirements, so a carrier at A- or above will satisfy most contracts.
You can look up any carrier's rating for free on the AM Best website (ambest.com) using their company search. The rating also appears on your quote, policy documents, and often the COI. If you use a broker, they will confirm the carrier's current rating before placing your coverage so you know it meets your contract requirements.
No. Most established carriers are rated by AM Best, but some—particularly newer insurers, certain surplus lines carriers, and specialty markets—may be unrated or rated by a different agency (like S&P, Moody's, or Demotech). An unrated carrier isn't automatically unsafe, but it can fail vendor requirements that specifically demand an AM Best rating, so confirm before binding.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.