If My Insurance Company Fails
When you buy insurance, you expect your insurance company to pay your claims. But, like any other business, an insurance company can have financial problems and be unable to meet its financial obligations. Most insurance companies licensed in Texas have guaranty associations to help pay their claims if they fail.
The guaranty associations in Texas are:
- The Texas Life and Health Insurance Guaranty Association, which covers life insurance, health insurance, and annuities. For more information, visit the association's website.
- The Texas Property and Casualty Insurance Guaranty Association, which covers homeowners, auto, and workers' compensation. For more information, visit the association's website.
- The Texas Title Insurance Guaranty Association, which covers title insurance and escrow shortage claims against title agencies. For more information, visit the association's website.
- Texas Self-Insurance Guaranty Fund, which covers workers' compensation benefits for self-insured groups.
Health maintenance organizations (HMOs), surplus lines carriers, and multiple employer welfare arrangements don’t have guaranty associations.
The guaranty associations pay a failed company’s claims up to a dollar limit, which varies by type of insurance. There’s no limit for workers’ compensation claims.
If your insurance company fails, you may also make a claim against the insurance company’s estate. You’ll get a notice explaining how to file a claim with the guaranty association and the company’s estate.
When shopping for insurance, follow these tips to protect yourself:
- Buy only from licensed companies and agents. Unlicensed companies usually don’t meet the state's financial requirements and might not have the money to pay claims. And if an unlicensed company fails, there’s no guaranty association to help pay its claims.
- Consider factors other than price. A company's financial rating indicates its financial strength and stability. Its complaint index can indicate its customer service record. The complaint index shows how the number of consumer complaints against the company compares with other companies selling the same type of insurance.
- Call our Consumer Help Line or visit our website to learn a company’s license status, its financial rating from an independent rating organization, and its complaint index.
Get Help from TDI
For insurance questions or for help with an insurance-related complaint, call the Consumer Help Line at 1-800-252-3439 or visit our website.
The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
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Last updated: 03/25/2016