How Financially Stable is Your Homeowners Insurance Company?

October 25, 2014 at 12:45 pm | No comment | Category: Homeowner's Insurance, Policyholder

How Financially Stable is Your Homeowners Insurance Company?

Policy coverage amounts, premiums, deductibles, additional coverage, and customer service ratings are all factors to help consumers choose the right homeowners insurance company for their family’s needs.  Price is often the deciding factor, but more and more families are using Financial Stability Ratings® to sort out cheap homeowners insurance policies from affordable homeowners insurance policies backed by financially sound companies.

Why Having a High Financial Stability Rating® is Important

Financial Stability Ratings® (FSRs) are a leading indicator of the financial stability of Property and Casualty insurers and Title underwriters, providing an objective baseline of the future solvency of an insurer.  In other words, FSRs summarize Demotech Inc’s opinion of the financial stability of an insurer regardless of general economic conditions or the phase of the underwriting cycle.

Several rating agencies work in this space, but Demotech was the first company of its kind to receive a formal review and due diligence from three federal organizations, HUD, Freddie Mac, and Fannie Mae.  Demotech performs financial analyses for Title, Property and Casualty insurers all over the USA and currently reviews and rates over 400 risk bearing entities. See the FSR assigned to Southern Oak Insurance here.

 

What Demotech Ratings Mean

  • A” (A Double Prime), Unsurpassed. Regardless of the severity of a general economic downturn or a deterioration in the insurance cycle, one hundred percent of the insurers receiving a Financial Stability Rating® of A” (A Double Prime) are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment.
  • A’ (A Prime), Unsurpassed.  Regardless of the severity of a general economic downturn or deterioration in the insurance cycle, at least ninety-nine percent of all the insurers countrywide receiving a Financial Stability Rating® of A’ (A prime) are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment.
  • A, Exceptional. Regardless of the severity of a general economic downturn or deterioration in the insurance cycle, at least ninety-seven percent of all the insurers countrywide receiving a Financial Stability Rating® of A are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment.
  • S, Substantial. Regardless of the severity of a general economic downturn or deterioration in the insurance cycle, at least ninety-five percent of all the insurers countrywide receiving a Financial Stability Rating® of S are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment.
  • M, Moderate. Regardless of the severity of a general economic downturn or deterioration in the insurance cycle, at least ninety percent of all the insurers countrywide receiving a Financial Stability Rating® of M are expected to have positive surplus as regards policyholders as of eighteen months from the initial date of rating assignment.
  • L, Licensed. Insurers earning a Financial Stability Rating® of L are Licensed by state regulatory authorities. These companies have been accessed but have not been given one of the FSRs listed above.

Southern_Oak_Insurance_Financial_Stability_Rating

Southern Oak Insurance has earned a Financial Stability Rating® of “A-Exceptional” from Demotech. This level of FSR is assigned to insurers with exceptional financial stability related to maintaining positive surplus as regards policyholders, liquidity of invested assets, an acceptable level of financial leverage, reasonable loss and loss adjustment expense reserves (L&LAE) and realistic pricing.

Southern Oak also has over $336M in first storm protection reinsurance coverage from A-Rated reinsurers. What this means is that Southern Oak can not only protect its policyholders from a first major storm, it can also protect its policyholders from multiple storms as well.

For more information on Financial Stability Ratings® or to speak with a Southern Oak representative, contact us here, or ask your local agent to compare the financial stability of Southern Oak with your current homeowners insurance provider.

For more information about Demotech or FSRs, visit www.demotech.com or call (800) 354-7207.

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