Do you worry about your insurance company going bankrupt?

dan1ecu

I have insurance for my collection. I got to thinking about the possibility of the insurance company going bankrupt. Would they have to give policy holders notice? Are insurance companies themselves required to carry insurance so that their clients will not suffer in case of bankruptcy? Perhaps the Federal Government provides this type of protection?

Is this something to worry about in today’s economy?

Dan

DesertLizard

Yes you would get notice.

No they do not have to carry insurance for property / casualty losses.

If they went under you would most likely get a refund of unused premium.

The Federal gov't provides zero, as they should, our taxes are too high already. Unlike a bank where you are protect up to $100k.

I would not worry about it. Worry about social security and health care in the US.

bulloncoins

This is a good question Dan,

What's not to worry about with today's economy? The problem here is a lot of people hate to discuss the econmics of collecting. They all love those beautiful expensive coins, but will argue for days about whether a true collector worries about money, or is in it just for the love of collecting.

Call your state Insurance regulators. They will be able to answer all you questions about insurance. Or look to see if they have a web site.

But if things ever get that bad, a bunch of old coins aren't going to buy you what a suitcase full of bullion coins will.

Higashiyama

For insurance on your collection, the financial implications of insurer bankrupcy are relatively small, unless you are unlucky enough to have an outstanding claim at the time they go bankrupt. The risk is losing part of a premium, and scrambling to find new coverage if they go under. Of course, if you have an outstanding claim when they go under . . .

Insurance is regulated at the state level, and state guaranty funds do exist, with coordination by the National Association of Insurance Commissioners. But, you would need to find a specialist in this area, or do some research to figure out the extent of protection you have.

Is your insurance with a major insurance company, e.g. - attached to a homeowners policy? In spite of the massive hits that property and casualty companies have taken worldwide over the past two years, most major companies remain fundamentally solid. You can obtain financial information on your insurance company through the state ins. dept. where it is licensed, or, if it is a listed company, can find additional information through SEC filings.

fishcooker

Since insurance companies have investments, there's more than one way, direct or indirect, for the government to assist them.

I have a bad memory but I recall that when hurricane Andrew devastated Florida, the Feds stepped in and assured that policy holders got claims paid.

meos1

Alrighty then;

Lets see. My experience tells me that when dealing with a company the following holds true:

1. You are bound by certain rules.
2. They are not bound to follow rules and at times can break the rules as they see fit to increase thier margins, etc.
3. The company does not have to pay you anything.
4. You will need to contribute big bucks during the next election to get the government to even notice your plight....

My advice, let it roll.

Dan

Lakesammman

My experience has been that, even if solvent, you'll have a hard time getting paid.

meos1

I am with you all the way Lakesammman! Companies in general are greasy weasles, insurance companies are like WD-40 weasles.

Dan

Higashiyama

Meos -- of course, we could just socialize the whole insurance system to make it fair and lower costs.

misterR

All they have to do is raise premiums when they need more money. Have you noticed your premiums rising lately? I have.

meos1

Sure, I wish I could just socialize the insurance business. Or better yet have a law passed that makes it mandatory that you carry auto insurance. Perhaps, legislators would be willing to do that for numismatics...Somehow, I don't see that happening.

Dan

PS: SC is in one of the largest budget crisises seen in my life time...Just five yars ago they bought new desk for each legilator for......$5000.

MadMarty

What you need to find out is how much surplus that they have on hand, and if they have any outstanding lawsuits pending. I worked for an insurance company long time ago, they lost a lawsuit and with the surplus gone, the company goes under! There is an agency here in IL called the Office of the Speical Deputy and they are in charge of liquidating the company and paying all the outstanding bills.

barberlover

I posted a related topic some time ago about desiring to keep my collection at home so i didn't have to go to the vault to see my coins and thats when we got onto coin insurance, i heard some very dissheartening stories about people making claims when there coins were stolen or damaged in fires getting compensated for there losses.

Someone even said that his coin imsurance even wanted to pay him face value for his stolen insured coins!!! That is a ripp off!!!

I understand why an insurere wouldn't insure your coins for PQ prices, but if your coins had appraisels or especially certification and you pay premiums for that protection, it should be spelled out in your policy either replacement cost or at the very least blue sheet bid values if the coins are certified. If your insurer of choice won't put that in writing before they start collecting your coin insurance premiums, then what good is having coin insurance? barberlover

Conder101

<< <i>Or better yet have a law passed that makes it mandatory that you carry auto insurance. >>

Are there actually states that don't have mandatory auto insurance laws!!!? I thought they all did. (Of course some people still don't bother to get it.)

MacCoin

as much insurance as I paid in this life time I think they are living pretty good. when they need more money the just raise the premium and its more money to them again. I'm insurance poor coins, home, car, health, life man I hate them.

JJacks

Based on this information, I don't think Insurance companies are exactly hurting:

Berkshire Hathaway Posts Record Profit

JJacks

Higashiyama

Actually, you probably shouldn't generalize Berkshire Hathaway's results to the broader industry. Results have been decidedly mixed, and generally on the downside. Especially for the large European companies, results have been extremely poor. Some US insurers (e.g. - CIGNA) have taken very big hits, and have reported losses. Even AIG has made major increases in loss provisions.

Warren Buffett and his team have yet again shown their remarkable talent.