In Florida, insurance companies are regulated by the state government. This is where the Florida Insurance Guaranty Association (FIGA) comes in. FIGA is a state-run organization that provides financial protection to Florida insurance policyholders in the event of an insurer’s failure. In other words, if your insurance company goes bankrupt, FIGA will step in and help to ensure that you still have coverage.
FIGA’s staff has been trained and developed to provide quick, fair, and professional claim service. The ultimate goal of their claims management team is to identify and pay covered claims before they become difficult or costly for policyholders or claimants. So if you’re not sure what to do if your insurer collapses, contact FIGA—they can guide you through the process and help ensure that you don’t lose out on important coverage. However, there are some things you should know if your insurance company does happen to go bankrupt.
The Cliff Notes: Key Takeaways From This Post
We dived into insurance insolvency in Florida and how FIGA can help; however, here are the key bullet points if you are in a rush:
- Florida is facing an insurance insolvency problem, with four insurers declaring bankruptcy since February.
- Florida residents should take measures to prepare for the possibility of further insurance bankruptcies.
- Policyholders need to submit a Proof of Loss form to FIGA—Florida’s Department of Financial Services—in order to file a claim.
- Coverage by the guaranty association is limited to $300,000 per policy.
- Information regarding insolvent insurers can be found on FIGA’s website.
- Claims must be filed within 90 days of the date of the insurance company’s bankruptcy in order for benefits to be paid out.
- Certain claims are not covered by FIGA, such as punitive damages or those that arise from fraudulently obtained policies.
- An uninsured loss may be able to be recovered through the Uninsured Loss Recovery Trust Fund.
- An insurance dispute lawyer can help if your insurance company goes bankrupt or you are having difficulty filing a claim.
Insurance Insolvency in Florida: An Alarming Situation
Florida is currently facing an insurance insolvency problem. This means that the Florida insurance industry is not able to meet its financial obligations and is at risk of going bankrupt. it was recently reported that Southern Fidelity announced bankruptcy, leaving nearly 80,000 Florida homeowners without insurance. Since February, the Tallahassee-based firm has been the fourth insurer to declare bankruptcy. There are a few reasons for this, including the recent hurricanes that have hit Florida. This is a major concern for Florida residents, as it could mean that they will not be able to get the insurance coverage they need in the event of another hurricane. It could also mean that those who have already filed claims following a hurricane will not be paid.
The Florida government is currently working on a solution to this problem, but it is not clear yet what that solution will be. In the meantime, Florida residents should keep a close eye on the situation and make sure they are prepared in case the insurance industry does go bankrupt.
Do You Have a Claim With an Insurance Company That Went Bankrupt?
Since so many insurance companies in Florida are going bankrupt, it is crucial that you know how this could affect you, your policy, and any future insurance claims.
What Can Florida Policyholders Do In This Situation?
If an insurance company is unable to pay out claims to their policyholders, the state guaranty association and fund will take over. The policies of the insolvent insurer will either be transferred to another insurance company or coverage will be continued by the guaranty association itself. Therefore, it is crucial for policyholders to keep up with their premium payments if their insurer has been taken over by the state.
Process for Contacting FIGA If Your Insurance Provider Is Insolvent
If you have a policy with an insurance company that becomes insolvent, there are a few steps you will need to take in order to file a claim. In order to file a claim with FIGA, you will need to submit a Proof of Loss form. This form can be obtained from your insurance agent or Florida’s Department of Financial Services. Once you have completed the form, you will need to send it to FIGA along with a copy of your insurance policy and any other supporting documentation.
FIGA will then review your claim and determine whether or not you are eligible for coverage. If you have a covered claim, you will need to submit a proof of loss form to FIGA within 90 days of the date of the insurance company’s bankruptcy. Once your claim is approved, FIGA will send you a check for the covered amount.
It is important to note that FIGA does not cover any losses that are not specifically listed in your insurance policy. Additionally, FIGA’s coverage is limited to $300,000 per policy. If your losses exceed this amount, you will need to seek compensation from other sources.
Important Information To Gather From The Insolvency Section on FIGA’s Website
You may discover not just which insurance companies have gone bankrupt but also the receiver for their firm, liquidation dates, important claim deadlines, and other data on the Insolvencies section of FIGA’s website.
Do You Know Your Claim’s Filing Deadline? Make Sure You Do
In order to ensure that you receive the benefits to which you are entitled in the event of an insurance company bankruptcy, it is important to be aware of your claim’s filing deadline. Filing a claim late could mean that your claim is denied, or that it is paid out from the bankruptcy estate rather than by the insurance company itself. So make sure you know when your claim needs to be filed, and submit it on time!
Will FIGA Pay For Any Type of Outstanding Insurance Claim?
No, Florida Insurance Guaranty Association (FIGA) does not pay every type of insurance claim. There are certain types of claims that are excluded from coverage, such as those for punitive damages or fines, and claims arising out of a policy that was obtained through fraud. In addition, FIGA will not pay any interest that may be owed on a claim.
Florida law requires all licensed insurance companies to be members of FIGA. However, some types of insurance companies, such as those that sell only workers’ compensation or property insurance to Florida-based customers, are not required to be members. As a result, claims against these insurers would not be covered by FIGA if they become insolvent.
Florida-based insurance companies that are not members of FIGA may still voluntarily elect to participate in the program. If a company elects to participate, it must notify FIGA within 30 days after it becomes insolvent.
How Does FIGA Statute F.S. 631.54 Define a Covered Claim?
As mentioned earlier, the Florida Insurance Guaranty Association (FIGA) will pay claims up to $300,000 per insured person and $500,000 per occurrence. This is known as a “covered claim.” Anything above those limits is considered an “uninsured loss.” There are some exceptions to what is considered a covered claim. For example, if the policyholder committed fraud or misrepresented themselves, that claim would not be covered. Claims for punitive damages are also not covered.
If you have an uninsured loss, you may still be able to recover some of your losses through the Florida Insurance Guaranty Association Uninsured Loss Recovery Trust Fund. This fund is used to reimburse policyholders for certain types of losses that FIGA does not cover. You can learn more about the Uninsured Loss Recovery Trust Fund by visiting the Florida Office of Insurance Regulation website.
Important FIGA Limitations That Could Impact You
You now know that if you have a policy with an insurance company regulated by FIGA, and that company goes bankrupt, your claim will be paid by FIGA. However, there are some important limitations to this protection.
1) FIGA Only Covers Certain Types of Policies
The policies it covers include homeowners, renters, and personal auto policies. It does not cover business, life, or health insurance policies.
2) FIGA Only Covers Claims That Are Made Against Florida-Based Insurance Companies
If you have a policy with an out-of-state insurance company, and that company goes bankrupt, your claim will not be covered by FIGA.
Can an Insurance Dispute Lawyer Help If Your Insurance Company Goes Bankrupt?
If your insurance company goes bankrupt, it is likely that you will not be able to receive the benefits that you are owed. This is because the insurance company will likely have to sell its assets in order to repay its creditors. However, if you have a dispute with your insurance company, you may be able to hire an insurance dispute lawyer to help you get the benefits that you are owed. An insurance dispute lawyer can help you negotiate with the insurance company or file a lawsuit against the insurance company if necessary. Lastly, an insurance dispute lawyer can help you file a claim with FIGA if your insurance company has gone bankrupt.
Book a Free Claim Review With Our Insurance Dispute Lawyers in Florida
FIGA has been providing financial protection to Florida insurance policyholders since 1970. If your insurance company goes bankrupt, FIGA will step in and help to ensure that you still have coverage. If you have a policy with an insurance company that becomes insolvent, you’ll need to file a claim with FIGA.
Our team of experienced insurance dispute lawyers at Herman & Wells can help guide you through the process and represent your interests in court if necessary. Contact us today for a free claim review.