I grew up with 4 siblings and sometimes getting my favorite foods wasn't easy. Craving a glass of milk just to find my brother left a teaspoon's worth left in the bottle or forcing myself to eat one extra cookie because I knew the box would be empty tomorrow was pretty maddening. Girl Scout cookies were especially valuable and I used to hide a box in the piano to make sure I got some. Those morsels became worth their weight in gold a week later when those roadside stands disappeared.
The concept of saving for a rainy day is familiar to most people, but is much easier with cookies than large sums of money. Financial advisers are a valuable resource in determining how much your individual family might need, taking into account fixed income and fixed expenses. But what about those one-time things: the unexpected vehicle repair, medical bills, vacations, etc? Combine all that together and you can come up with a number to lay-away for the future but sometimes only insurance products can protect from the truly disastrous events.
Companies run much like families and insurance companies have to make the same decisions: how much should we stow away for a rainy (maybe a VERY rainy) day? Reserves and Policyholder Surplus are basically a very full bank account based on a % of the total written premium, used to pay for claims as they arise. Liquidity is an important factor in getting the money out to you, the policy holder. Once the Girl Scout cookies run out, it takes a whole year to get more!
Companies are rated based on their ability to pay claims using their reserves, policyholder surplus, and reinsurance. Some companies are better prepared, with more money in reserve, than others are. The top companies are given A++ ratings and the weakest are given an F. The state wont even allow a company to sell insurance in its state if it doesn't meet certain require requirements. These proactive actions keep consumers safe in case a major event comes along.
Several insurers in Florida are in danger of soon losing their A ratings because those companies don’t have enough in the rainy day fund. Homeowners insurance, auto insurance and business insurance companies are all affected. Make sure the company protecting your dreams isn't one of them, contact us today for an A rated quote from one of the best agencies around!