January 11, 2010

The Steps To Take If Your Auto Insurance Company Goes Under

The first step you must take in the event your auto insurance company goes under is to search for insurance under another carrier. When doing so, keep your policy documents where you can easily find them, as they will be helpful when you shop for new insurance. You will likely want your new policy to provide the same sort of coverage as your previous one. Your policy documents the vehicle(s) insured, the parties authorized to drive the vehicle(s), and the types of coverage you purchased. Your policy documents will also outline limits on your liability coverage, provisions for uninsured or underinsured motorists, personal injury protection and whether you had collision and comprehensive coverage. Although shopping for insurance is inconvenient and time consuming, it does provide an opportunity for you to take stock of your personal situation and consider if the coverage you signed up for five years ago is still good for your needs today.

When you purchased auto insurance, you did so for the dreaded contingency that you might have an accident. Insurance companies are obligated to review claims for accidents occurring within the calendar dates of coverage on the policy. If you had an accident and your carrier went under, you’ll have to look into how your coverage claims will be carried over to another entity. If your carrier went into rehabilitation or liquidation, you might have to check with your state insurance department about how its claims are being handled. Another possibility is that the company could have been taken over by another carrier. Regardless of what happened to your auto insurance company, you’ll need to learn how its former claims are being handled. This is important for two reasons. First, you may still need no-fault benefits for medical treatment if you were injured in the accident. Additionally, you may need to be defended against a plaintiff if you’re being sued in connection with the accident – which is a service your auto insurance policy provides for. Because a carrier’s remaining assets may be consumed quickly if it’s in some form of receivership or state protection, you should move quickly.

You probably never thought you would have to replace your auto insurance due to your agency going under. However, use this opportunity to your advantage. Take time to reflect upon your assets and the scale of protection that’s necessary for you and your family. Look at things you might change on your policy to either save some money or enjoy better protection. And, again, if you had pending claims, move quickly to learn how they are now being handled. Following these steps will ensure you retain the proper coverage while on the road.