AM Best rating: the insurer grade NEMT contracts ask for, and how to check yours
Overview
An AM Best rating is a letter grade, such as A- or B++, for an insurer's financial strength. NEMT contracts set a floor: Paratransit Services in Washington asks for B++ from admitted insurers, Arizona Medicaid subcontracts and Hamilton County, Ohio ask for A-, and Transdev's Oregon FAQ asks for B+. The grade rates the insurer, not your coverage.
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What does an AM Best rating tell you?
An AM Best Financial Strength Rating is an independent opinion of an insurer’s financial strength and its ability to meet its ongoing policy obligations. AM Best’s guide sorts the grades into categories:
- Superior. A++ and A+
- Excellent. A and A-
- Good. B++ and B+
- Fair. B and B-
- Marginal, weak and poor. C++ down to D
Three other labels matter to a contract. NR means AM Best has not rated the insurer. E marks an insurer in conservation or rehabilitation, or under regulatory action that limits payments to policyholders. F marks one in liquidation after a finding of insolvency.
The rating belongs to the insurer, the company named on your certificate of insurance. AM Best states that it is not assigned to specific policies, does not address claims-payment procedures, and may be changed, suspended or withdrawn at any time. Contracts that cite it also add a Roman numeral, such as Class VII, which is AM Best’s financial size category.
What rating do NEMT contracts require?
It depends on the buyer, from B+ to A-. These are current examples, so read your own contract.
| Buyer | Minimum rating | Other conditions |
|---|---|---|
| Paratransit Services, Washington (subcontractor insurance requirements) | B++, Class VII | Admitted in Washington. A surplus lines insurer needs A-, Class VII |
| Arizona Medicaid plan subcontracts (revised January 9, 2025) | A- VII | Licensed in Arizona or on the state’s approved non-admitted list |
| Hamilton County, Ohio (RFP, December 2025) | A-: VII | Company licensed in Ohio |
| Transdev Health Solutions, Oregon (FAQ, January 2024) | B+ or higher | Licensed in Oregon |
How do you look up your insurer’s rating?
Search AM Best’s own site for the insurer named on your certificate of insurance. The ACORD form lists each insurer with its NAIC number, and Transdev’s Oregon FAQ sends providers to AM Best for the rating. Check again at every renewal, because a rating can change during the policy year and each contract has its own floor. The full check, from the exact legal company name to the license and the surplus lines list, is in the guide to NEMT insurance companies.
What if your insurer falls short?
- Ask your agent for a rated insurer that can write the policy. The insurance buying guide covers the quote process.
- If the insurer is surplus lines, check the contract. Washington’s Paratransit Services asks for a higher grade from surplus lines insurers than from admitted ones. The Texas Department of Insurance notes that these insurers are not guaranty association members, so claims may go unpaid if the insurer fails.
- If the coverage comes from a risk retention group, ask the buyer in writing whether it accepts one. Federal law has such a group chartered in one state and registering in the others, and Hamilton County asks for a company licensed in Ohio. Arizona exempts approved insurance pools from its AM Best requirement.
- Treat the minimum as a floor and not a safety guarantee. Arizona’s terms say the state does not warrant that its minimum rating is enough to protect a contractor from an insurer’s insolvency.
Frequently asked questions
- What do the letters and numerals in A- VII stand for?
- The letter is AM Best's financial strength grade, and A- sits in its Excellent category. The Roman numeral is AM Best's financial size category, a separate measure of how large the insurer is. Contracts such as Arizona Medicaid's subcontract terms and Hamilton County's 2025 solicitation ask for both parts together as a minimum.
- Does a good rating mean the insurer will pay my claim?
- Not by itself. AM Best says its rating is not assigned to specific policies and does not address an insurer's claims-payment practices. Arizona's Medicaid terms add that the state does not warrant that the minimum rating is enough to protect a contractor from an insurer's insolvency.
- Can a surplus lines insurer meet a rating requirement?
- It can. Paratransit Services in Washington accepts a surplus lines insurer rated A-, Class VII or better. Texas publishes a list of eligible surplus lines insurers with their AM Best ratings, and the list says the Department of Insurance does not officially approve them or check their finances, except for Texas-based ones. The Department adds that they are not guaranty association members.
- What if my insurer has no AM Best rating?
- AM Best marks an insurer it has not rated NR, and an unrated insurer cannot meet a contract that sets a minimum grade. Ask your agent which rated insurers can write the policy, or ask the buyer in writing whether it accepts another approved arrangement. Arizona exempts approved insurance pools from its AM Best requirement.
