Edison Insurance AM Best Rating – Evaluating This Niche Carrier

When shopping for insurance, a carrier’s financial strength rating from AM Best is a key factor to consider. This rating assesses an insurer’s ability to pay out future claims. However, smaller or niche insurers like Edison Insurance may not have an AM Best rating. How should this impact your evaluation of Edison as a potential insurance provider?

This in-depth guide examines Edison Insurance’s lack of an AM Best rating, alternative financial strength indicators for the company, and what it ultimately means for consumers.

Overview of Edison Insurance

First, let’s look at some background on Edison Insurance:

• Founded in 2005 in Florida
• Focuses solely on homeowners insurance
• Only offers coverage in Florida
• Not rated by AM Best
• A+ (Superior) rating from Better Business Bureau (BBB)

As a relatively young and niche insurer operating in a single state, Edison does not yet have sufficient financial data for AM Best to formally rate them. However, the lack of an AM Best rating does not necessarily indicate issues with financial stability.

Purpose and Significance of AM Best Ratings

AM Best is a leading credit rating agency focused exclusively on the insurance industry. Their Financial Strength Ratings assess insurers’ financial ability to pay out future claims.

Key things to know:

• Rated on quantitative and qualitative factors
• Scale ranges from A++ (Superior) to D (Poor)
• Considers balance sheet strength, operating performance, business profile and other factors

These independent ratings are a trusted indicator of stability. Most large national carriers have AM Best Ratings of A or higher.

Why Edison Insurance is Not Rated by AM Best

There are a few likely reasons why Edison Insurance is not rated by AM Best:

• Too new and limited operating history
• Niche market focus on one state
• Small premium volume compared to national insurers

AM Best needs sufficient data to analyze, which emerging or regional carriers may lack. The rating process is also voluntary – some insurers opt not to participate.

So the lack of a published rating for Edison is not necessarily concerning. It is more reflective of their size and operating strategy.

Alternative Indicators of Edison’s Financial Strength

While not AM Best rated, there are other positive signs regarding Edison Insurance’s financial viability:

A Rating from Demotech:

• Demotech focuses on regional and specialty carriers
• Edison holds an A rating for “Exceptional” financial stability

A+ Rating from Better Business Bureau:

• High BBB rating based on complaint handling

backed by A-Rated Reinsurers:

• Reinsurance arrangements indicate confidence

So while it would be ideal for Edison to have an AM Best rating in the future, these alternative indicators help provide assurance in the meantime.

Complaints and Reviews to Consider

When assessing any lesser-known carrier like Edison, it is also important to pay attention to consumer feedback:

• Numerous complaints filed against Edison with state regulators
• Below-average reviews from policyholders on sites like ConsumerAffairs
• Complaints focus on claim delays and coverage disputes

This pattern of policyholder complaints should be a red flag in considering Edison. Even if their financials check out on paper, poor service is a risk.

Evaluating Carriers Without AM Best Ratings

While AM Best ratings provide an objective look at financial stability, they are not available for all insurers. When evaluating carriers without AM Best ratings, make sure to:

• Review alternative rating sources like Demotech
• Check BBB rating and complaint volume
• Research policyholder feedback and reviews
• Learn about their reinsurance arrangements
• Ask about their reserves and capital ratios
• Consider the company’s background and management

This provides a more complete picture of smaller niche players. An independent agent can offer additional insight as well.

Key Factors in Choosing Insurance Carriers

An insurer’s financial strength and ability to pay claims are certainly critical considerations. However, keep these additional factors in mind as well when selecting coverage:

• Risk appetite – Willingness to cover unique exposures
• Policy offerings – Products offered and coverage enhancements
• Service reputation – Responsiveness to customers and claims
• Industry experience – Length of time in the insurance business
• Local presence – Proximity of sales and service resources

Finding the optimal balance of coverage, price, and service requires evaluating carriers from multiple angles. While AM Best ratings are ideal, they’re not the only factor for niche insurers.

Is Edison a Good Choice for Insurance?

Given the lack of AM Best rating, niche focus, limited operating history, complaints activity, and poor reviews, we would currently characterize Edison as a high-risk selection for insurance purposes.

While they may offer affordable rates, the concerns around service and financial stability outweigh the potential cost savings. There are more proven carriers to choose from in Florida’s property insurance market.

Our recommendation is to continue searching for options with established reputations, satisfied customers, quality service, and clear financial strength. Don’t let price alone drive the insurance buying decision.

Final Thoughts