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 offers a short overview of FIGA and what it might imply on 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 important 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 coated 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 goal of an insurance coverage warranty affiliation is to guard policyholders by guaranteeing 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 embrace:
- 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 below Florida legislation and the relevant insurance coverage coverage;
- Figuring out advantages for coated 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 approved insurance coverage firms in Florida as a way to generate funds essential to pay coated 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 grow to be bancrupt;
- The correct to reinsure, assume, or cede reinsurance to handle its liabilities and obligations, and the suitable to pursue subrogation towards any social gathering answerable for inflicting the loss;
- The correct to carry authorized actions or intervene in authorized proceedings, together with actions towards the bancrupt insurer or any third social gathering which may be answerable for the coated claims;
- The correct to take part within the liquidation or rehabilitation proceedings of the bancrupt insurer and signify the pursuits of policyholders;
- The authority to require approved insurers to supply data vital for the administration of its duties and operations and to generate reviews and supply data to regulatory authorities.
What Is the Most Quantity FIGA Will Cowl?
The utmost quantity FIGA will cowl is mostly $300,000 per coated declare. An extra $200,000 is offered for constructions 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 below Florida legislation 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 forestall any new or present lawsuits towards FIGA from continuing (see F.S. 631.67). The aim of the keep is to allow FIGA to acquire vital 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 might be substituted because the defendant instead of the insurance coverage firm that has grow to be bancrupt, and the policyholder can proceed towards FIGA. Policyholders must be conscious that the six-month keep may very well be prolonged if FIGA requests an extension from the court docket, 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 except 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 towards FIGA earlier than any relevant deadlines.
Much like insurance coverage firms, FIGA has its personal adjusters who’re skilled and licensed, and usually are geared in direction of early recognition and fee of coated claims which should be resolved to keep away from monetary hardship to the policyholder. Policyholders shouldn’t really feel they must settle their declare for lower than what could also be owed simply because the insurer turned bancrupt and FIGA has taken over the dealing with of their declare.
Extra details about FIGA will be discovered at FIGA’s web site, FIGAFacts.com. The location additionally presents a method to decide if an insurer is one in every of its member insurance coverage firms. FIGA membership will be decided by conducting a search right here.
Why Merlin?
When you’re a policyholder who has a declare that has just lately been taken over by FIGA, don’t hesitate to contact Merlin Regulation Group. With practically 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 might help you perceive the method when FIGA takes over and might 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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