Suppose your insurance coverage firm sends you a letter notifying you that it’s liquidating, and you’ve got a pending declare that can now be dealt with by FIGA (the Florida Insurance coverage Warranty Affiliation). The place does that go away your declare? What do you do now? This text gives a quick overview of FIGA and what it could imply to your declare.
What Is the Florida Insurance coverage Warranty Affiliation?
FIGA is a nonprofit affiliation that was established by the State of Florida to guard policyholders when an insurance coverage firm turns into bancrupt. It’s a statutorily created affiliation whose predominant accountability is to guard policyholders from monetary loss following the insolvency of an insurance coverage firm.
What Occurs When FIGA Takes Over?
FIGA steps in and assumes the accountability of the failed insurer by paying lined claims, coverage advantages, and different associated bills for the failed insurance coverage firm. It additionally retains observe of the monetary stability of insurers working in Florida, conducts common assessments to establish potential monetary dangers, and takes motion to guard policyholders when wanted.
What Is the Objective of an Insurance coverage Warranty Affiliation?
The primary objective of an insurance coverage warranty affiliation is to guard policyholders by making certain the continued availability of insurance coverage protection and monetary help within the occasion {that a} policyholder’s insurance coverage firm turns into bancrupt.
What Powers Does FIGA Have?
FIGA’s powers embody:
- Taking up an bancrupt insurer’s insurance policies, and investigating, negotiating, and settling excellent claims on that insurer;
- Figuring out whether or not a declare is roofed underneath Florida regulation and the relevant insurance coverage coverage;
- Figuring out advantages for lined claims that haven’t been paid as much as sure statutory limits;
- Representing the pursuits of policyholders all through the liquidation course of and advocating for his or her rights;
- Authority to levy assessments on different licensed insurance coverage corporations in Florida in an effort to generate funds essential to pay lined claims and conduct its operations;
- Providing assets and data to assist policyholders perceive their rights and navigate the claims course of ought to their insurer turn into bancrupt;
- The suitable to reinsure, assume, or cede reinsurance to handle its liabilities and obligations, and the correct to pursue subrogation in opposition to any social gathering liable for inflicting the loss;
- The suitable to convey authorized actions or intervene in authorized proceedings, together with actions in opposition to the bancrupt insurer or any third social gathering which may be accountable for the lined claims;
- The suitable to take part within the liquidation or rehabilitation proceedings of the bancrupt insurer and signify the pursuits of policyholders;
- The authority to require licensed insurers to offer data obligatory for the administration of its duties and operations and to generate experiences and supply data to regulatory authorities.
What Is the Most Quantity FIGA Will Cowl?
The utmost quantity FIGA will cowl is usually $300,000 per lined declare. An extra $200,000 is on the market for buildings and contents on owners’ claims. All FIGA claims are topic to a $100 deductible.
It’s necessary to understand that the utmost limits are topic to sure exclusions and deductibles underneath Florida regulation and the relevant coverage. Moreover, claims for non-covered losses or damages wouldn’t be eligible for FIGA protection.
What Do Policyowners Have to Know About FIGA?
Within the occasion {that a} Florida insurance coverage firm goes bankrupt there’s a provision within the Florida Statutes that requires an computerized keep for six months to stop any new or present lawsuits in opposition to FIGA from continuing (see F.S. 631.67). The aim of the keep is to allow FIGA to acquire obligatory claims data and put together any relevant defenses for these claims. If there’s a pending lawsuit, then nothing can occur within the case for six months. As soon as the six-month interval elapses, FIGA shall be substituted because the defendant rather than the insurance coverage firm that has turn into bancrupt, and the policyholder can proceed in opposition to FIGA. Policyholders needs to be conscious that the six-month keep might be prolonged if FIGA requests an extension from the courtroom, which is what occurred in 2023 with UPC Insurance coverage.
Policyholders also needs to know that FIGA covers claims for losses that happen previous to the liquidation of the failed insurer or inside 30 days after the order of liquidation until the house owner replaces the coverage previous to the 30 days expiring. FIGA additionally refunds unearned premiums.
It’s additionally necessary for policyholders to understand that there’s a statute of limitations relevant for claims transferred to FIGA. Policyholders must settle their declare with FIGA or file a lawsuit in opposition to FIGA earlier than any relevant deadlines.
Much like insurance coverage corporations, FIGA has its personal adjusters who’re educated and licensed, and customarily are geared in direction of early recognition and cost of lined claims which should be resolved to keep away from monetary hardship to the policyholder. Policyholders shouldn’t really feel they should settle their declare for lower than what could also be owed simply because the insurer grew to become bancrupt and FIGA has taken over the dealing with of their declare.
Extra details about FIGA could be discovered at FIGA’s web site, FIGAFacts.com. The positioning additionally gives a method to decide if an insurer is considered one of its member insurance coverage corporations. FIGA membership could be decided by conducting a search right here.
Why Merlin?
Should you’re a policyholder who has a declare that has not too long ago been taken over by FIGA, don’t hesitate to contact Merlin Regulation Group. With almost 40 years of observe and $2 billion in recovered claims, our staff stands by your aspect to make sure you can face any insurance coverage problem with confidence. Our staff may also help you perceive the method when FIGA takes over and may also help resolve your declare. Contact us at present for a session, or learn extra about how we’re your trusted advocate.
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