Car insurance ratings can help you find a financially sound insurer that responds quickly and fairly to customer service and claim issues.
Rating agencies such as AM Best and S&P Global can help you gauge an insurance company’s financial strength, which is essential – you want to be confident that your insurer has the financial strength to pay out a claim when disaster strikes.
Financial strength isn’t the only thing that matters, though. How a company treats its policyholders is also important. Market research firm J.D. Power publishes several annual ratings reports based on customer satisfaction, while the National Association of Insurance Commissioners (NAIC) tracks consumer complaints against carriers and compares them to an industry benchmark.
- Insurance ratings comprise a score that a rating agency creates to convey an insurance company’s complete financial strength.
- Always check the financial strength of any insurance company you are considering when shopping for a new policy.
- Customer satisfaction ratings gauge how happy policyholders are with the service they receive, from policy management to claims resolution.
What are insurance company ratings?
Insurance ratings comprise a score that a rating agency creates in an easy-to-read format. These rating agencies look at various factors, including a company’s financial strength, how the company is run and the people in key leadership positions.
Rating agencies will also consider external factors that could impact a company’s financial strength, such as policyholders’ vulnerability to storm claims or other natural disasters. Other organizations examine customer satisfaction by surveying policyholders and analyzing consumer complaints filed with state regulators. Taken together, these ratings can provide consumers with valuable insight when choosing an insurer.
How are insurance companies rated?
Several organizations analyze and rate insurance company performance. Some of the most notable include AM Best, S&P Global, J.D. Power and the National Association of Insurance Commissioners (NAIC), all of which we consulted for this report. Other credit-rating agencies include Fitch Ratings, Kroll Bond Rating Agency and Moody’s.
How are insurers’ finances rated?
Financial ratings are based on various criteria to ensure they encompass all facets of the insurance company’s business. Rating agencies like AM Best and S&P Global want to be confident an insurance company can handle a weak or struggling economy, a major natural disaster resulting in a huge spike in claims and other factors that could impact their ability to pay out claims.
Each rating agency has its own proprietary formula for setting a rating, but they generally use the same data, so ratings should fall in the same general area. If one rating agency rates an insurer dramatically lower than others, look closer to determine why.
Here are some common factors a rating agency will look at.
- Cash on hand: Does the insurer have enough cash to deal with everyday business expenses and the ability to pay out claims?
- Debt ratio: The company’s debt is divided by its financial assets. A high debt ratio can indicate financial trouble.
- Revenue streams: A company with multiple revenue streams is typically stronger than one that gets most of its revenue from a single source. Large, nationwide insurers also offer additional financial services and multiple lines of insurance, giving them numerous revenue streams.
- Risk management: Insurers must decide if a potential client is a good risk, and their risk-management protocols determine who they offer a policy to and their rate. If their risk-management protocols are poor, they may have very risky policies.
- Insurance policies: Companies that only write one type of coverage or mainly insure high-risk drivers or homeowners often have lower financial ratings. Seek insurance companies that offer a wide variety of policies and don’t only offer high-risk coverage.
AM Best ratings: What do they mean?
AM Best is a global credit rating agency specializing in evaluating insurance companies’ financial strength and stability, helping consumers and businesses assess an insurer’s ability to meet its obligations.
Its ratings are based on financial performance, business profile and risk management, providing insights for policyholders, investors and regulators. It assigns a letter grade ranging from A++ (Superior) to D (poor) to each company it evaluates.
The chart below explains what the various grades for AM Best mean.
| Rating categories | Rating symbols |
|---|---|
| Superior | A++ |
| Superior | A+ |
| Excellent | A |
| Excellent | A- |
| Good | B++ |
| Good | B+ |
| Fair | B |
| Fair | B- |
| Marginal | C++ |
| Marginal | C+ |
| Weak | C |
| Weak | C- |
| Poor | D |
| Under regulatory supervision | E |
| In liquidation | F |
Auto insurance company ratings: AM Best
The largest insurance companies in the U.S. are all highly rated by AM Best, with financial strength ratings of A or better. This indicates that their business operations are stable and able to meet financial obligations.
State Farm, the nation’s largest insurer, has the highest possible AM Best rating of A++ (Superior). Progressive, the second-largest carrier in the nation, is rated just a notch below at A+ (Superior) and Geico, the third-largest insurer, also has an A++ rating. Amica Mutual was not rated.
See AM Best scores for the largest auto insurance companies in the U.S. in the table below.
| Company | AM Best Rating |
|---|---|
| State Farm | A++ |
| Progressive | A+ |
| Geico | A++ |
| Allstate | A+ |
| USAA | A++ |
| Liberty Mutual | A |
| Farmers | A |
| Travelers | A++ |
| American Family | A |
| Nationwide | A |
S&P Global credit ratings: What do they mean?
S&P Global measures the creditworthiness of companies in various industries, including insurance, utilities and financial services, and conducts market research and analysis of corporate and governmental entities.
Investors and market participants use this information to make financial decisions, but consumers can also use it to make informed decisions when choosing a carrier.
See what S&P Global’s credit ratings mean in the table below.
| Ratings categories | Ratings symbols |
|---|---|
| Extremely strong capacity to meet financial commitments. | AAA |
| Very strong capacity to meet financial commitments. | AA |
| Strong capacity to meet financial commitments. | A |
| Adequate capacity to meet financial commitments. | BBB |
| Less vulnerable in the near term, but faces major ongoing uncertainties toadverse business, financial and economic conditions. | BB |
| More vulnerable to adverse business, financial and economic conditions butcurrently has the capacity to meet financial commitments. | B |
| Currently vulnerable and dependent on favorable business, financial andeconomic conditions to meet financial commitments. | CCC |
| Highly vulnerable; default has not yet occurred, but is expected to be a virtual certainty. | CC |
| Currently highly vulnerable to non-payment and ultimate recovery is expectedto be lower than that of higher rated obligations. | C |
| Payment default on a financial commitment or breach of an imputed promise;also used when a bankruptcy petition has been filed or similar action taken. | D |
Auto insurance company ratings: S&P Global
All of the largest insurance companies earn solid S&P ratings of A or higher. Geico and USAA earned the highest grade of AA+, which indicates they have a very strong capacity to meet their financial obligations. Allstate and Amica Mutual were not rated.
See auto insurance companies’ S&P ratings in the table below.
| Company | Rating |
|---|---|
| State Farm | AA |
| Progressive | AA |
| Geico | AA+ |
| Allstate | N/A |
| USAA | AA+ |
| Liberty Mutual | A |
| Farmers | A |
| Travelers | AA |
| Amica Mutual | N/A |
| Nationwide | A+ |
Consumer satisfaction and customer complaints matter, too
Financial strength is important because consumers and investors want to know that a carrier has the stability to meet its financial obligations in good times and bad and provide quality service to its policyholders.
Market research firm J.D. Power conducts independent surveys and studies to measure customer satisfaction, product quality and buyer behavior across various industries, including the automotive and insurance sectors.
The National Association of Insurance Commissioners (NAIC) is a nongovernmental agency representing state and territorial insurance commissioners that conducts research, establishes best practices and provides regulatory guidance. Its Consumer Complaint Index tracks customer complaints lodged with state Departments of Insurance.
J.D. Power ratings: Understanding claims satisfaction scores
J.D. Power is a consumer intelligence and data analytics company. The annual U.S. Auto Claims Satisfaction Study and U.S. Insurance Shopping Study are two of the major surveys it conducts.
The auto claims study features overall nationwide scores, while the insurance shopping study breaks insurance company scores down into national and regional insurers.
Auto insurance company ratings: J.D. Power
Below are scores from J.D. Power’s 2024 U.S. Auto Claims Satisfaction Study, which asks policyholders to rate their satisfaction with their carriers. Results vary widely among insurers and can change dramatically from year to year.
In the 2024 survey, regional carrier NJM Insurance was ranked No. 1 out of 22 insurers evaluated, with a score of 782 out of 1,000.
Amica Mutual was the top-rated national carrier, in second place with a score of 746. Among the nation’s largest insurers, Progressive finished in second-to-last place (only Mercury was rated lower) with a score of 672 out of 1,000.
| Company | J.D. Power Claims Satisfaction Ranking |
|---|---|
| State Farm | 710 |
| Progressive | 672 |
| Geico | 692 |
| Allstate | 691 |
| USAA | 726 |
| Liberty Mutual | 717 |
| Farmers | 706 |
| Travelers | 684 |
| Amica Mutual | 746 |
| Nationwide | 728 |
NAIC ratings: Understanding consumer complaint scores
The National Association of Insurance Commissioners (NAIC)’s Consumer Complaint Index is a tool for measuring a company’s performance in terms of customer complaints. A score of 1.0 denotes an average volume of complaints. If a company’s score exceeds 1.0, it signifies that it is dealing with more complaints than the typical company. Conversely, a score less than 1.0 indicates a company receiving fewer complaints than the average.
This site’s complaint index assigns insurers a score based on how many complaints the insurer received compared to the number of policies it sells. This gives you a clear picture of insurance providers and how often they receive a complaint.
Auto insurance company ratings: NAIC
Travelers is the highest-rated national insurer based on NAIC’s Complaint Index. Its score of 0.521 was well below the industry benchmark of 1.0. Liberty Mutual had the highest score, 2.86, which indicated a much higher rate of complaints than the industry standard. Amica Mutual was not rated.
See NAIC scores from the largest auto insurance companies in the U.S. in the table below.
| Company | NAIC Score |
|---|---|
| State Farm | 0.794 |
| Progressive | 0.707 |
| Geico | 0.686 |
| Allstate | 1.097 |
| USAA | 1.178 |
| Liberty Mutual | 2.86 |
| Farmers | 0.86 |
| Travelers | 0.521 |
| Nationwide | 0.632 |
Why are insurance company ratings important?
If your insurance company doesn’t have the financial strength to pay claims when a disaster strikes, your insurance company’s ability alone is not protecting you or your car.
It is key to be able to depend on your insurance company’s financial obligations when a natural disaster or other covered peril hits your home or car, so it is important to check the financial strength of any insurance company on your short list.
Insurance companies can and do go bankrupt. They may underprice their policies or end up with more claims than anticipated. Regardless of the reason, if your insurer declares bankruptcy when you have a claim in process, there is a good chance you will not be paid out.
Always check the financial strength of any insurance company you are considering when shopping for a new policy.
How to check insurance company ratings
Visit the rating website directly and search for your insurance company by name.
“Consumers can check the financial stability and customer service performance of their insurer through credible third parties. This includes its claims-paying ability and how it handles other customer service issues,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute (Triple-I).
He gave the following advice for checking insurance company ratings:
- AM Best: Provides a financial strength rating, which rates the company’s financial health and its ability to pay claims. We recommend consumers choose companies that are rated either Superior (A+ or A++) or Excellent (A or A-) to ensure they are protected by a company that is fiscally strong and can pay a high volume of claims in the event of a natural catastrophe, such as a hurricane, wildfire, tornado or flood.
- J.D. Power: Conducts national and regional consumer surveys to determine how satisfied policyholders are with the customer service provided by their insurer. Consumers may want to reconsider being insured by companies that are consistently rated below average compared to their peers, especially in the way they handle claims.
- National Association of Insurance Commissioners (NAIC): Tracks the number of complaints filed by policyholders with state-specific departments of insurance. A company with an above-average volume of policyholder complaints is a red flag.
- S&P Global rates insurance companies for financial stability based on their creditworthiness. As with AM Best ratings, consumers should look for an insurer with an A or better rating.
Final thoughts: How to choose an insurer based on ratings
Insurance company ratings can give you visibility into a company’s financial strength, ability to pay out claims, customer satisfaction for claims service and more. Ultimately, shoppers must choose an insurer that offers the best policy and customer service at the best price.
Frequently asked questions
What do I do if my current insurer has a low rating?
If your current insurer has a low financial strength rating from AM Best of S&P Global, has a high NAIC consumer complaint score or fares poorly in one of J.D. Power’s annual surveys, you may want to shop around for a carrier with better ratings. A poorly rated insurance company could spell trouble if and when you have to file a claim or need policy assistance. Do your homework before you switch insurers; a company with better ratings may not be the best choice if you can’t afford its rates or it doesn’t offer the coverage options you need.
How often should I check a car insurance company’s rating?
You should check a car insurance company’s ratings every six to 12 months or before you renew your current policy or shop for new coverage.
Can a highly rated insurance company still have customer complaints?
Even the best insurance company may not be able to satisfy all of its customers all of the time. If you’re unhappy with how your carrier handles your claim or the service it provides, talk with your agent or a customer representative. If you’re still unsatisfied, contact your state Department of Insurance and file a complaint. And don’t be afraid to take your business elsewhere; in most cases, you can switch carriers at any time without penalty.
Resources & Methodology
Sources
- J.D.Power. “Auto insurance repair cycle times improve but price increases take a toll, J.D. Power finds.” Accessed March 2025.
- S&P Global. “Understanding credit ratings.” Accessed March 2025.
- S&P Global. “Research update: USAA outlook changed to negative on earnings volatility; ‘AA+’ rating affirmed following revised capital model criteria.” Accessed March 2025.
- S&P Global. “Farmers Insurance Exchange outlook revised to stable from negative on revised criteria, ‘A’ ratings affirmed.” Accessed March 2025.
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