What AM Best's Upgrades Mean for Parking Lot Insurance and Risk Management

Stop losing sleep over surprise insurance changes: how AM Best upgrades reshape coverage and costs for parking lot operators in 2026

Parking operators and event parking managers already juggle staffing, traffic flow, and customer expectations — the last thing you need is an insurer change that raises premiums or shrinks coverage just before your busy season. In 2026, insurer rating moves (like AM Best upgrades) are a practical signal with direct effects on premiums, underwriting, and the real-world protections you can buy. This article explains how those rating decisions work and gives clear, actionable steps to protect your operation.

Executive summary: the bottom line for parking operators

AM Best ratings matter because they reflect an insurer's capital strength, claims-paying ability, and enterprise risk management — all factors that influence market appetite for particular risks and pricing. When an insurer is upgraded (example: Michigan Millers Mutual to A+ (Superior) and aa- issuer credit rating in Jan 2026), expect a chain reaction:

• Greater underwriting capacity and higher limits from that carrier;
• Potentially lower premiums or tighter retention/terms negotiated for creditworthy policyholders;
• Faster claims handling and greater confidence in solvency after major losses;
• More flexible coverage endorsements — especially useful for event or short-term parking programs;
• Conversely, downgrades lead to higher rates, narrowed coverage, and capacity squeezes.

Why AM Best ratings affect your policy more than you think

Ratings are not just letters. AM Best evaluates insurers on balance-sheet strength, operating performance, business profile, and enterprise risk management (ERM). These measurements determine the insurer's cost of capital, reinsurance relationships, and willingness to accept specific risks — all of which feed into the price and terms you see on your quote.

Key transmission mechanisms

• Cost of capital: Higher-rated insurers often access cheaper capital and reinsurance, allowing them to price competitively.
• Reinsurance capacity: A strong rating signals attractive reinsurance terms and shared pool support — this matters for operators needing high limits for large events.
• Underwriting appetite: Upgrades often coincide with expanded appetite; downgrades trigger tightening and non-renewals for marginal risks.
• Claims confidence: Venues and municipal partners prefer insurers with better ratings that are likely to pay claims quickly and fully.

"AM Best's rating changes are as much about future solvency expectations as they are about present-day pricing. For operators reliant on temporary event cover, that reliability is everything." — paraphrased insight from recent AM Best actions (Jan 2026)

2025–2026 market context you need to know

Late 2025 and early 2026 saw important shifts that affect parking risk pricing and capacity:

• Carrier consolidation and pool formation: Regional carriers have been entering pooling agreements or joining groups to improve balance sheets and spread catastrophic risk. The Jan 2026 extension of Western National ratings to Michigan Millers after a pooling arrangement is a direct example.
• Reinsurance market stabilization: Following volatile catastrophe years, reinsurers showed signs of selective capacity returning in late 2025 — improving options for well-rated primary carriers.
• New exposures on the rise: EV charging liability, automated payments and kiosk cyber risk, and higher event frequency are expanding coverage needs for parking operators in 2026.
• Municipal and venue requirements: Many cities and venues now demand carriers with AM Best ratings at or above A- (Excellent) for police/venue contracts, increasing the importance of rating moves.

How an upgrade (like Michigan Millers in Jan 2026) affects parking lot premiums

Upgrades can lower premiums, but not automatically for every insured. Here's how the pricing dynamics typically play out:

Direct effects

• Lowered risk charge: Better ratings mean the insurer can hold less expensive capital and negotiate better reinsurance, often translating to smaller risk loads built into premiums.
• Improved terms: Underwriters may reduce required deductibles or broaden automatic endorsements — which reduces your total cost of risk even if the headline premium changes only slightly.

Indirect effects

• Increased competition: A newly upgraded company may grow more aggressive to win market share, pushing markets to quote more competitively.
• Contract compliance: If clients mandate higher-rated carriers, you may gain market access to large venues without paying a premium penalty.

Bottom line: upgrades create negotiating leverage. But because underwriting still focuses on your loss history and controls, the best way to convert a rating move into a price change is to present a low-risk profile.

How rating changes reshape underwriting standards

Underwriting is the gatekeeper for coverage. Ratings impact what gatekeepers permit:

• Capacity and limit availability: Higher-rated carriers can offer larger single-policy limits and drop the need for layered placements — valuable for large events and venue contracts.
• Eligibility rules: After upgrades, insurers may expand into new classes (e.g., valet operations, stadium parking) or offer tailored event packages. Downgrades typically lead to stricter eligibility and more exclusions.
• Attachment points: Insurers may change deductible structures. Upgrades may allow lower deductibles, while downgrades push higher retentions.
• Endorsement flexibility: Higher-rated carriers are more likely to accept bespoke endorsements such as primary-and-noncontributory wording, waiver of subrogation, or CVAP (certificate holder) variations.

Coverage changes you can expect — and should negotiate

Insurer ratings influence what coverages are offered and how broad they are. Key coverage areas for parking operators include:

• General liability: Limits, defense costs, aggregate language, and exclusions tied to valet operations and event activities.
• Commercial auto: For shuttles and attendants moving vehicles (including hired/non-owned auto exposures).
• Excess/umbrella: Attachment points and stacking rules — better-rated carriers can often offer cleaner excess terms.
• Property and kiosk coverage: Payment kiosks, EV chargers, lighting, and signage — often underinsured in parking programs.
• Cyber and privacy: Payment processing and mobile apps create exposures that top-rated carriers may be more willing to underwrite.
• Liquor liability and event-specific: Temporary liquor exposures for festivals and sporting events; well-rated carriers can offer packaged event forms.

Practical steps parking operators should take (action plan)

Turn rating changes into advantage. Use this step-by-step checklist to translate market movement into tangible improvements in coverage or savings.

1. Monitor ratings and reinsurance affiliations monthly

• Track AM Best announcements and the insurer's reinsurance affiliation codes. Upgrades like Michigan Millers' A+ often come with a "p" code indicating pooling support — which affects claims capacity.
• Set alerts for your carrier(s) and key competitors so you can react quickly at renewal time.

2. Insert rating requirements into your contracts

• Require carriers to maintain at least an A- (Excellent) AM Best rating (or the specific rating your venue mandates).
• Include a covenant to replace coverage within a defined period if a carrier is downgraded or non-renewed.

3. Prepare a loss-control package

• Document lighting, drainage, CCTV, speed bumps, training, valet checklists, and incident reporting procedures.
• Provide photos and SOPs to underwriters — low friction in risk assessment often yields better pricing and endorsements.

4. Re-negotiate at renewal when ratings move favorably

• Use upgrades as leverage for rate reductions, lower deductibles, or expanded forms. Ask for rate credits or better terms tied to the carrier's upgraded rating.
• Request a written credit for improved rating if your carrier solicits renewal business aggressively.

5. Update your certificate and additional-insured language

• Confirm endorsements — primary/non-contributory, waiver of subrogation, and additional insured wording are often the most contentious items in claims.
• Make sure certificates list insurer AM Best ratings where contractually required.

6. Consider program design changes

• Multi-year policies and captive arrangements can lock in better pricing when markets soften due to upgrades.
• Layered placements may be simplified when primary carriers raise limits after an upgrade, reducing brokerage and placement costs.

7. Address emerging 2026 exposures explicitly

• Get EV charging liability and kiosk cyber risks endorsed or included — don't assume general liability covers them fully.
• For event parking, secure temporary event endorsements for liquor, crowd-related incidents, and higher attendance caps.

Negotiation tactics that work

When a carrier you use gets an upgrade, act fast and prepare your case:

1. Gather your loss history, safety improvements, and event schedules into a one-page risk summary.
2. Ask your broker to request a rating-based credit or enhanced endorsements tied to the upgrade.
3. Compare 2–3 alternative quotes to demonstrate competitive pressure — upgraded carriers will often match or beat the market to grow.
4. Negotiate non-price terms: lower deductibles, primary-and-noncontributory endorsements, and faster claim response SLAs.

What to do when an insurer is downgraded

Downgrades are urgent. Typical operator responses:

• Start shopping immediately if your policies are up for renewal within 6 months.
• Consider buying difference-in-conditions (DIC) or excess placements from higher-rated carriers to protect key exposures.
• Re-evaluate contractual commitments that required a high-rated insurer — you may need to negotiate extensions or replacements.

Case study: Midwestern event parking operator (hypothetical)

Background: A regional event parking operator in the Midwest used a carrier that joined a Western National pool. After Michigan Millers received an AM Best upgrade to A+ (Jan 2026), the operator:

• Renegotiated a three-year primary liability program with increased limits and a lower deductible;
• Secured a clean excess placement from a top-tier carrier that required an A+ primary;
• Added EV charging liability and kiosk cyber coverage endorsements at a modest additional premium;
• Captured a 6% reduction in total cost of risk through rate credits and lower broker fees due to simplified layered placements.

Lesson: The operator turned a rating upgrade into improved coverage and lower friction at claims time by preparing loss-control documentation and asking for tangible concessions.

Checklist: What to ask your broker or insurer this renewal

• What is the insurer's current AM Best Financial Strength Rating and Issuer Credit Rating?
• Does the insurer participate in any pooling or reinsurance agreements? Ask for the "p" affiliation code if applicable.
• Can you provide a rating-based premium credit or lower deductible tied to recent upgrades?
• Do policy forms include EV charging, kiosk/cyber, valet exposures, and temporary liquor liability? Request specific endorsements.
• Supply a written SLA for claims handling and a commitment on excess placement stability.

Advanced strategies for larger operators and event portfolios

If you manage multiple parking facilities or run high-frequency event operations, consider these advanced tactics:

• Captive programs — Create a captive or join a risk pool to stabilize cost of risk and reduce dependence on market cycles tied to rating moves.
• Parametric coverages — Use parametric insurance for weather-driven revenue losses at outdoor parking venues.
• Layer optimization — Revise layers and attachment points when a primary carrier upgrades to reduce excess policy costs.
• Data-driven underwriting — Invest in telematics, parking-flow analytics, and incident data to demonstrate lower risk and secure better rates.

Final takeaways — what every parking operator should remember

• AM Best upgrades and downgrades are operational events: They change who will write your business, at what price, and with which conditions.
• Act proactively: Monitor ratings and update contracts, certificates, and loss-control documentation in response.
• Use upgrades as leverage: Ask for credits, lower deductibles, or broader endorsements when your carrier's rating improves.
• Don't ignore emerging 2026 exposures: EV charging, kiosk cyber, and event liquors are now core items to negotiate into forms.

Where to go from here — a simple 30-day plan

1. Week 1: Audit current carriers and document AM Best ratings; flag any carriers below A-.
2. Week 2: Prepare a one-page loss-control and exposure summary for your broker.
3. Week 3: Request a market review: ask for revised quotes, enhanced endorsements, and any rating-related credits.
4. Week 4: Negotiate renewals or place excess layers; update contract language to require minimum AM Best ratings going forward.

Closing: Don't let rating changes surprise your business

As the insurance landscape evolves through 2026, rating moves from AM Best are more than industry headlines — they are levers that change pricing, capacity, and coverage options for parking lot operators and event managers. Use the upgrade/downgrade signals to sharpen your negotiations and strengthen your insurance program.

Ready to convert AM Best news into better coverage and lower risk? Start with a free policy audit. Contact our team at carparking.app to get a tailored renewal playbook, carrier rating monitoring, and a loss-control package that makes underwriters compete for your business.

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