Exact insurer. Current rating.
Contract requirements.
Educational content • September 2026
Possibly, if a boat loan, marina agreement, charter arrangement or other contract requires insurance from a carrier with a minimum financial-strength rating. An agreement may require coverage to be placed with an insurer rated A− or better by AM Best. If that insurer is downgraded to B+ or B, the policy may no longer satisfy the agreement’s requirements and coverage may need to be updated.
An AM Best Financial Strength Rating is the agency’s independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance obligations. Under AM Best’s published scale, A− is “Excellent,” B+ is “Good,” and B is “Fair.”
A financial-strength rating does not grade the coverage in a particular policy, guarantee that every claim will be paid or determine whether the policy is appropriate for a particular boat.
A downgrade does not automatically cancel the policy or eliminate its contractual coverage. However, when a third party agreement specifically requires an A− or better carrier, a downgrade may place the boat owner out of compliance. The consequences depend on the applicable contract, which may require replacement insurance from an acceptable carrier.
Carrier ratings matter because they provide an independent measure of financial strength. Some agreements establish minimum rating requirements. Check the rating when purchasing or renewing coverage and know whom to contact if it changes.
This diligence can help prevent an unwelcome surprise.
