When you’re shopping for insurance, price and customer service are important. Will you be happy with claims service? Will you want to renew your policy and recommend the company? If you have said yes to these questions than the next thing to review is the companies financial rating. A high rating from a financial rating company is a good indicator of financial strength. Ask your People’s Trust representative today for information on People’s Trust's rating from Demotech or view it on the web here: www.demotech.com.
According to Demotech, “A Financial Stability Rating® summarizes our opinion as to the insurer’s ability to insulate itself from the business cycle that exists in the general economy as well as the underwriting cycle that exists in the insurance industry. Thus, an FSR summarizes our opinion as to the relative ability of an insurer to survive a downturn in general economic conditions as well as a downturn in the underwriting cycle.
In the Property & Casualty Insurance industry, general economic conditions impacting the Property & Casualty insurance industry include, but are not limited to, the rate of claim inflation, interest rates, investment income yields and overall economic activity. Underwriting cycle conditions include, but are not limited to, overall price adequacy, mix of premium by state, loss and loss adjustment expense reserve levels, reserve adequacy, liquidity, expense levels, utilization of reinsurance, collectability of reinsurance, financial leverage, investments in affiliates, dependency on a particular distribution system, etc.”
So what does this all mean? Basically, you want to be insured with a company that is going to have the financial means in the event of a catastrophe. If your current carrier doesn’t pass the test, consider switching. When you select an insurance company make sure it’s financially sound, do your research, check ratings from Demotech and also check reviews and testimonials.
Source: Some information for this article was obtained from Demotech website, to learn more about Demotech you can visit their website at www.demotech.com.