Most of us are covered by at least one type of insurance policy to protect against things like car accidents and burn injuries stemming from a house fire. While it is a rare occurrence, instances do arise when an insurance company becomes insolvent and is unable to pay an injured party’s claims. When insurance companies fail, organizations like the Kansas Insurance Guaranty Association (KIGA) are there to help protect consumers.
What to Do When an Insurance Company Goes Out of Business
When an insurance company goes out of business, some of its customers may be confused about the next steps to take with their personal injury settlement or other matters. This is where the Kansas Insurance Guaranty Association comes into play. The KIGA exists to pay out the claims of now defunct insurance companies, up to the lesser of the policy limits available prior to the insolvency or $300,000. However, there are some key elements to keep in mind as you work through a claim with the KIGA.
- If a lawsuit has been filed and your case is in litigation prior to the Liquidation Order against the at-fault driver’s insurance company, your case will be put on hold for up to 60 days to allow the KIGA to take over the defense of the claim. This can be inconvenient and cause delays in the resolution of your case, but it is imperative that no action is taken during this time so as not to jeopardize your claim with the KIGA.
- If you have not already filed a claim with the insolvent insurer prior to the Liquidation Order, a claim will need to be filed with the KIGA. The claim must be filed within 18 months of the date of the Liquidation Order, if no deadline is indicated in the Order or the final date to file a claim as noted in the Order if a deadline is given, whichever is earlier.
- You must exhaust all other available insurance before the KIGA has any obligation to pay. You will be required to complete an Affidavit of All Other Insurance so that the KIGA is aware of which insurance companies are obligated to pay, and how much coverage is available through these companies.
For example, Say you were in an automobile accident where the at-fault driver had a policy limit of $100,000 per person for bodily injury and you have an uninsured/underinsured motorist (UM/UIM) policy of $50,000 per person for bodily injury.
Typically, your UM/UIM coverage would not be required to pay in this instance because there is coverage available through the at fault party’s insurance and your policy limit is lower than theirs. But assume that before you had a chance to present your claim to the at-fault driver’s insurance, the insurance company is declared insolvent and ordered to be liquidated. In this instance, you would be required to exhaust your UM/UIM coverage before the Kansas Insurance Guaranty Association would have any obligation to pay.
- As noted above, there are limits to what the KIGA will pay out. If the policy of the insolvent insurance company is less than $300,000 in total, the KIGA will only pay out up to the limit of previously applicable policy. Unfortunately, the KIGA will not pay out any more than $300,00. As such, even if the previously applicable policy was for $1,000,000, the most you could recover through the KIGA would be $300,000. If the value of your claim exceeds $300,000, and your only avenue of recovery is through the KIGA, your attorney can help guide you through negotiating down liens and medical bills to maximize the amount of that recovery going into your pocket.
These are just some of the key items you need to keep in mind when presenting a claim with the KIGA. The KIGA is governed under K.S.A. 40-2901 through 2919. An experienced personal injury attorney, like the trial lawyers at Patterson Legal Group, can help you navigate your claim with the KIGA if the insurance company of the driver who hit you goes belly up.
Have a Kansas Insurance Guaranty Association Claim?
Should you need assistance with a Kansas Insurance Guaranty Association claim then contact Patterson Legal Group immediately. Our team of experienced attorneys will do everything possible to help you navigate the process as quickly as possible. Let us take care of all your legal needs so that you can focus on recovering from your injuries. Remember, our Kansas personal injury lawyers work on a “no win, no fee” basis, which means that you don’t pay a dime unless we recover money for you.
You can reach Patterson Legal Group 24 hours a day, 7 days a week by phone at 316-550-0000 and online through LiveChat or encrypted contact form. For an unbeatable blend of extraordinary customer service and winning case results, Patterson Legal Group is the choice for you.
The information on this blog is for informational purposes only. It is not meant to serve as legal advice for an individual case or situation. This information is not intended to create an attorney-client relationship nor does viewing this material constitute an attorney-client relationship.