Because Los Angeles is so densely populated, there is stiff competition in the automobile insurance industry. Insurance companies aggressively seek new clients and, in doing so, sometimes offer great deals. Unfortunately, as we have seen on the national scene, insurance companies that were once thought to be invulnerable giants, have collapsed or been shored up by historic government bailouts.
What happens if my insurance company becomes insolvent?
California Insurance Guarantee Association (CIGA) is a government entity, a life preserver of sorts, to step in cover claims when worker's compensation, homeowner's, and automobile insurance insurers become insolvent. CIGA is authorized to assumed an insolvent insurer's obligations including defending the insured and negotiating settlements. To be covered by CIGA if your insurance company becomes insolvent, a claim regarding the insurer's insolvency must be filed within 6 months of the insolvency. The claim must be on the form issued by the Insurance Commissioner.
Claims regarding CIGA and insolvent insurers are partly governed by California Insurance Code Sections 1021-1024. Case law, i.e. decisions of the California Court of Appeal and the California Supreme Court, also form the body of law governing how insolvent insurer cases are handled.
If you have questions regarding your automobile liability insurance, please contact the personal injury attorneys at Abel Law Offices to schedule a confidential consultation.
