Your property may be protected even if your insurance company goes out of business.
If you find that your insurance company has gone out of business, it's reassuring to know that there are organizations in place to protect your interests. Each state has a life and health insurance guaranty association that will continue coverage for holders of life, health, disability, accident and long-term care policies. Each state has an insurance guaranty fund that will continue coverage for holders of property and casualty insurance policies.
National Organization of Life and Health Insurance Guaranty Associations
The National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) is an association of state guaranty associations that protect life and health insurance policyholders if their insurance company goes out of business. In some states, the guaranty association also covers disability insurance and variable annuities. Usually long-term care insurance is considered health insurance for the purpose of providing guaranty coverage. NOLHGA maintains a list of state guaranty associations on its website. Refer to that list for details about specific coverage in your state.
Pennsylvania Life and Health Insurance Guaranty Association
The Pennsylvania Life and Health Insurance Guaranty Association is an association of life, accident and health insurers licensed in Pennsylvania. The association provides continued coverage to policyholders if an insurer goes out of business. The maximum benefit paid varies by policy type. Death benefit is limited to $300,000, cash surrender of life insurance to $100,000 and health insurance claim to $300,000. Maximum annuity benefits depend on the status of the contract on the date of insolvency: if annuitized, $300,000; if in deferred status, $100,000.
National Conference of Insurance Guaranty Funds
The National Conference of Insurance Guaranty Funds (NCIGF) is an association of state property and casualty guaranty funds that protect property and casualty insurance policyholders if their insurance company goes out of business. NCIGF maintains on its website a directory that provides contact information for each state guaranty fund and a list of links to the websites of individual state guaranty funds. Refer to that list for details about specific coverage in your state.
Texas Property and Casualty Insurance Guaranty Association
The Texas Property and Casualty Insurance Guaranty Association (TPCIGA) is an association of property and casualty insurers licensed in the state of Texas. Membership in the association is a requirement for selling property and casualty insurance in Texas. TPCIGA processes covered claims for policyholders when an insurer goes out of business. It covers the full amount of workers' compensation benefits and the lesser of $300,000 or the insurance policy's limit for any other type of claim.
