Many times over my 32 years as an insurance broker I have been asked about the purpose and value of an AM Best Rating for an insurance company. AM Best rates insurance companies based on the amount of money they have available to pay claims, as well as the management of the company. Just like a school grade. When you buy a home you have to give your bank proof of insurance from an "A" rated insurance company.
So what does it mean when an insurance company is rated "B" or not rated at all? Well since your lender wont accept anyone rated less than an "A" they feel there is a risk that the insurance company may not be able to fulfill its obligations. In other words pay claims. If there was not this risk than why wouldn't a bank accept any insurance company? If there was not a greater risk to you the home buyer why wouldn't your bank allow you to send them proof of insurance from an unrated insurance company?
Would you buy your life insurance from a company that wasn't rated? Neither would or do I.
Here is the great news. Since 2007 GDI has been working on a way to secure the market value of your new home. So if you buy a home you don't have to worry so much about it dropping in value. We decided to do the extra work, spend the extra money to get our product backed by an "A" rated insurance company. I have been asked why, since we could have had our product done in 2008 with a company rated less than "A". My simple answer was "I wouldn't buy my insurance from a company rated less than "A" by am best unless I had no other choice.
So to protect the families buying new homes we can cover the value of your home up to 20%. Click here to learn more!