What minimum A.M. Best's rating is required for insurance companies providing coverage to a Remax franchisee?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
All insurance coverage required pursuant to this Subsection must be maintained under one or more policies of insurance—and contain such terms and conditions—as specified from time to time by REMAX Regional. You agree to obtain insurance policies with an insurance company that has an A.M. Best's rating of at least an A- and an A.M. Best's financial size category of at least VIII.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, franchisees must secure insurance policies from companies with a minimum A.M. Best's rating of A- and a financial size category of at least VIII. This requirement ensures that the insurance provider has a strong financial standing and the ability to meet potential claims.
For a prospective Remax franchisee, this means they need to verify that their chosen insurance company meets these minimum ratings. Failure to do so could result in non-compliance with the franchise agreement. Remax Regional has the right to change the minimum amount of coverage required under any policy and require different or additional kinds of insurance to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances.
It is important for franchisees to understand that Remax Regional retains the right to designate a specific insurance agency or broker for franchisees to use, potentially limiting their choice of providers. Additionally, failure to maintain the required insurance coverage is considered a material breach of the franchise agreement, which could lead to termination. Franchisees must provide certificates of insurance to Remax Regional at least 30 days before the policy's effective date and annually thereafter to demonstrate compliance.