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 depart your declare? What do you do now? This text supplies a short 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 most 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 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 Function 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 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 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 approved insurance coverage firms in Florida to be able to generate funds essential to pay lined claims and conduct its operations;
- Providing sources and data to assist policyholders perceive their rights and navigate the claims course of ought to their insurer grow to be bancrupt;
- The proper to reinsure, assume, or cede reinsurance to handle its liabilities and obligations, and the appropriate to pursue subrogation in opposition to any get together chargeable for inflicting the loss;
- The proper to carry authorized actions or intervene in authorized proceedings, together with actions in opposition to the bancrupt insurer or any third get together which may be chargeable for the lined claims;
- The proper to take part within the liquidation or rehabilitation proceedings of the bancrupt insurer and symbolize the pursuits of policyholders;
- The authority to require approved insurers to supply info needed for the administration of its duties and operations and to generate stories and supply info to regulatory authorities.
What Is the Most Quantity FIGA Will Cowl?
The utmost quantity FIGA will cowl is usually $300,000 per lined declare. A further $200,000 is obtainable for buildings and contents on householders’ claims. All FIGA claims are topic to a $100 deductible.
It’s necessary to remember 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 forestall 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 needed claims info 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 will probably be substituted because the defendant instead of the insurance coverage firm that has grow to be bancrupt, and the policyholder can proceed in opposition to 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 must also 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 home-owner replaces the coverage previous to the 30 days expiring. FIGA additionally refunds unearned premiums.
It’s additionally necessary for policyholders to remember that there’s a statute of limitations relevant for claims transferred to FIGA. Policyholders have to settle their declare with FIGA or file a lawsuit in opposition to 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 cost of lined claims which have to be resolved to keep away from monetary hardship to the policyholder. Policyholders shouldn’t really feel they need to 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 affords a strategy to decide if an insurer is considered one of its member insurance coverage firms. FIGA membership will be decided by conducting a search right here.
Why Merlin?
If you happen to’re a policyholder who has a declare that has just lately been taken over by FIGA, don’t hesitate to contact Merlin Legislation Group. With practically 40 years of observe and $2 billion in recovered claims, our workforce stands by your facet to make sure you can face any insurance coverage problem with confidence. Our workforce can assist you perceive the method when FIGA takes over and can assist resolve your declare. Contact us right now for a session, or learn extra about how we’re your trusted advocate.
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