What Insurance Companies Went Out Of Business?
Overview of Insurance Companies Going Out of Business
Insurance companies go out of business for a variety of reasons. It could be due to mismanagement, market forces, or simply not having enough revenue to stay afloat. Whatever the cause, when an insurance company goes under, it can leave policyholders in a difficult situation. Those who have insurance policies with the company may be left without coverage and have to find another insurer to provide them with the coverage they need. In some cases, policyholders may even be left without the money they had paid into the policy.
Recent Insurance Companies to Go Out of Business
In recent years, there have been a number of insurance companies that have gone out of business. Some of the more notable names include the Assurant Health insurance company, which shut its doors in 2018, and the Health Republic of New Jersey, which did the same in 2016. The latter was one of the 23 Consumer Operated and Oriented Plans (CO-OPs) created under the Affordable Care Act, and its sudden closure left thousands of customers in the lurch.
In 2017, the Health Plan of San Joaquin, a CO-OP in California, also ceased operations. This was followed by the closure of the Land of Lincoln Health CO-OP in Illinois in the same year. These are just some of the high-profile cases of insurance companies going out of business in recent years.
What Happens to Policyholders When an Insurance Company Goes Out of Business?
When an insurance company goes out of business, the first thing policyholders should do is contact the state’s department of insurance. The department of insurance will be able to provide policyholders with information on what to do next. Depending on the state, the department of insurance may be able to provide policyholders with a new policy, help them transition to a new insurer, or provide them with other resources.
In cases where policyholders have prepaid premiums, they may be able to file a claim with the state’s guaranty association. The guaranty association is a state-run organization that provides coverage in case of insolvency. They may be able to provide policyholders with a portion of the money they had paid into the policy.
What Can Policyholders Do to Avoid Being Caught in a Similar Situation?
In order to avoid being left without coverage when an insurance company goes out of business, policyholders should take some basic precautions. The first is to make sure the insurance company they are dealing with is financially stable. To do this, they should check the company’s ratings from independent rating agencies such as A.M. Best and Standard & Poor’s. A good rating from these agencies is an indication of the company’s financial health.
Another precaution policyholders should take is to make sure they are dealing with a licensed and reputable insurer. Policyholders should also make sure they read and understand the terms and conditions of the policy they are signing up for. This is important so they can be sure they are getting the coverage they need and that they understand what they are signing up for.
Insurance companies go out of business for a variety of reasons, and when they do, it can leave policyholders in a difficult situation. In order to avoid being left without coverage when an insurer goes out of business, policyholders should make sure they are dealing with a financially stable and reputable insurer. They should also read and understand the terms and conditions of the policy they are signing up for so they can be sure they are getting the coverage they need.