What if my Insurance Company goes out of Business?

Answer:
Check with your state’s department of insurance.

Most states have an insurance guarantee association that all of the insurers licensed to do sell insurance in the state must belong to or pay into in the form of assessments.

When one of the member insurers is insolvent or placed into receivership, the insurance guarantee association covers their insurance claims up to certain limits as set by the state statutes.

If your insurance company goes out of business, you should contact your state’s department of insurance and find out what your next step should be. You may have a time limit to file claims.

In addition, a new insurance company may be assigned to take over the policies of a bankrupt insurance company. Most states encourage other companies to step in and service the policyholders of an insolvent insurer.

Since guarantee associations often limit how much they’ll pay, it’s smart to check out an insurer’s stability before you buy or renew a policy. Check with A.M. Best, Moody’s Investor Services, and Standard and Poor’s Insurance Ratings Services.


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