Online Auto Insurance Emphasizes Value of Choosing the Best-Rated Companies
Seattle, WA, October 11, 2010 --(PR.com)-- In their newest FAQ, the writers at OnlineAutoInsurance.com explain what happens when auto insurance companies become insolvent and give advice on how to avoid carriers that may be faltering financially.
Though plenty of assistance has been made available to consumers looking for the best-rated auto insurance companies there is no way to guarantee that an insurer will remain financially sound. According to the Insurance Information Institute, rating agency A.M. Best reported that there were 18 property/casualty carrier insolvencies in 2009.
State regulators take many measures to ensure as much as possible that carriers in their states do not become insolvent, or unable to make good on their financial obligations. At-risk carriers in theory get flagged early in the road to insolvency, at which point state regulators step in and give orders as to how to improve an insurer’s financial standing. If a rehabilitation of the coverage provider proves unsuccessful, and it is considered insolvent, the government can order the company to liquidate, effectively putting it out of business.
Once the insurer’s assets are sold off, the money from this may go to cover any outstanding claims. According to the Washington state Department of Insurance, “The liquidation process can take many years to complete.” So, in order to expedite the process, states have established Guaranty Associations - which are usually funded by insurers in proportion to the amount of policies they have in place - that pay out on these financial obligations.
Source: http://www.insurance.wa.gov/consumers/tips/financiallytroubled.shtml
The extent to which guaranty associations will pay for each claim varies from state to state.
In addition, guaranty associations may also repay policyholders for unearned premiums - premiums paid for coverage beyond the point of insolvency. Connecticut regulators give the example of a $1,000, one-year policy; if coverage was canceled because of insolvency after six months, there is $500 of unearned premiums. The guaranty fund may pay the policyholder a portion of this unearned premium. The Connecticut guaranty fund, for example, pays for 50 percent of the unearned premiums up to a maximum of $2,000.
To read the full article and learn about how to find the best-rated companies, readers can go to http://www.onlineautoinsurance.com/learn/ to this and the rest of the site’s FAQs.
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Though plenty of assistance has been made available to consumers looking for the best-rated auto insurance companies there is no way to guarantee that an insurer will remain financially sound. According to the Insurance Information Institute, rating agency A.M. Best reported that there were 18 property/casualty carrier insolvencies in 2009.
State regulators take many measures to ensure as much as possible that carriers in their states do not become insolvent, or unable to make good on their financial obligations. At-risk carriers in theory get flagged early in the road to insolvency, at which point state regulators step in and give orders as to how to improve an insurer’s financial standing. If a rehabilitation of the coverage provider proves unsuccessful, and it is considered insolvent, the government can order the company to liquidate, effectively putting it out of business.
Once the insurer’s assets are sold off, the money from this may go to cover any outstanding claims. According to the Washington state Department of Insurance, “The liquidation process can take many years to complete.” So, in order to expedite the process, states have established Guaranty Associations - which are usually funded by insurers in proportion to the amount of policies they have in place - that pay out on these financial obligations.
Source: http://www.insurance.wa.gov/consumers/tips/financiallytroubled.shtml
The extent to which guaranty associations will pay for each claim varies from state to state.
In addition, guaranty associations may also repay policyholders for unearned premiums - premiums paid for coverage beyond the point of insolvency. Connecticut regulators give the example of a $1,000, one-year policy; if coverage was canceled because of insolvency after six months, there is $500 of unearned premiums. The guaranty fund may pay the policyholder a portion of this unearned premium. The Connecticut guaranty fund, for example, pays for 50 percent of the unearned premiums up to a maximum of $2,000.
To read the full article and learn about how to find the best-rated companies, readers can go to http://www.onlineautoinsurance.com/learn/ to this and the rest of the site’s FAQs.
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Online Auto Insurance
Benjamin Zitney
909-784-2471 x111
http://www.onlineautoinsurance.com/
Benjamin Zitney
909-784-2471 x111
http://www.onlineautoinsurance.com/
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