WEDNESDAY, JULY 31, 2013
Insuring with a financially strong insurance company is important. Often, the tendency is to shop for an insurance company that offers the lowest premium while overlooking other critical areas.
Three insurance companies operating in Michigan have been closed down already this year because of poor financial condition - the Lumberman's Mutual Group (formerly known as Kemper), Ullico Casualty Company and, on June 12, 2013, American Fellowship Mutual. This can leave policyholders in a lurch - especially if there is an open claim.
There are several firms that provide ratings for insurance companies. We recommend insuring with a company that has an AM Best rating of "A-" or better. AM Best's ratings will also tell the outlook for the insurance company, whether it is stable or negative. A negative outlook is an indicator that the current rating may be downgraded in a future review.
So, what happens if you are caught in a situation where your insurance company becomes insolvent or, in effect, bankrupt? If you have an outstanding claim, you may be eligible to have at least a portion of your claim settled by the Michigan Property & Casualty Guaranty Association (MPCGA). The amount you are eligible to receive depends on a number of factors.
Another thing to avoid, if at all possible, is to insure with a company that is not licensed in the State of Michigan since only licensed insurance companies are supported by the MPCGA. If you must insure with a non-licensed insurance company (often referred to as a non-admitted insurance company), it becomes even more important to make sure the carrier is highly rated.
INSURANCE PLANNING SERVICE chooses only to represent highly rated insurance companies to reduce the chance that our customers don't find themselves in the predicament of having their insurance company become insolvent. Call us at 800-220-5582 or contact us on the web today. We would be happy to discuss your insurance with you!
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