Why is the rating for insurance companies important?

The rating of your insurance company is important for two reasons. First and most importantly, you want to be sure the company can pay any claims that you may have. Second, it can affect the cost of premiums; larger and more cost-efficient insurance firms may be able to offer lower prices. To find out, ask your insurance company for its A.M. Best (www.ambest.com/ratings/guide.asp) or Standard & Poor’s (www.standardandpoors.com/ratings/insurance/en/us) rating.