AIG Enhances Auto Insurance Coverage Despite Financial Setbacks
Before the financial downturn that began in 2008, American International Group or AIG was one of the largest insurers in the world. Due to a crisis in liquidity, AIG needed a massive bail-out by the U.S. Government and the Federal Reserve. Today, the company remains under government supervision as it works to pay off its loans and restructure its business. Nevertheless, AIG Insurance continued to write insurance policies in most major areas, including auto insurance, after the government bail-out began.
Before July of 2009, AIG Insurance was an option for anyone looking for auto insurance coverage. In fact, despite the setbacks suffered by the company, AIG Insurance added some important enhancements to its auto insurance policies that were worth consideration. One of the major enhancements was a comprehensive security program for insured drivers. Included in this package were such benefits as emergency roadside, medical and travel assistance, available 24 hours a day. The emergency medical and travel assistance provided coverage for anyone traveling anywhere in the United States or Canada.
Another enhancement by AIG to its auto insurance coverage was the lifting of any restrictions on where an insured driver could get his or her car repaired. Many insurance companies limit insured drivers to using only those repair shops on a predetermined list. AIG Insurance could recommend a reliable repair shop, but the insured driver would make the final decision. Also, AIG Insurance would reimburse the insured driver's chosen repair shop directly, eliminating unnecessary delays in settling the bill.
AIG's auto insurance coverage was originally provided through its subsidiary, AIG Direct. In 2005, AIG purchased 21st Century Insurance, and in late 2008, moved all of its auto insurance business to this division. In July of 2009, AIG sold 21st Century Insurance to Farmers Insurance Group. With this sale, AIG was no longer in the business of selling auto insurance, and Farmers Insurance Group became the third largest provider of personal lines of insurance in the U.S. As part of AIG's restructuring plan, AIG no longer provides quotes for any type of insurance except term life insurance.
AIG continues to operate during its restructuring process, although as mentioned, its auto insurance business in the U.S. now belongs to Farmers Insurance Group. Negotiations continue with many other companies to purchase the remainder of AIG's subsidiary businesses and other assets. At present, it is not clear whether AIG has any long-term prospects of being a profitable company, free of government control. The restructuring plan may ultimately leave some core businesses in AIG control, or it may eventually sell off so much of AIG's profitable businesses that its survival as an independent company will be doubtful.
