what to do if your insurer fails

If your insurer is put into liquidation, you will want to maintain insurance protection by replacing your insurance coverage right away. Claims will be considered by PACICC in respect of events which occur on or before the date of the court order to wind-up the insurer and for up to 45 days afterwards. This 45-day period should give you enough time to arrange new insurance coverage. Of course, if your policy expires within the 45 days, claims will only be considered for events that occurred before your policy expired.

You must exhaust all other sources of insurance coverage before submitting a claim to PACICC.

The maximum recovery from PACICC is $250,000 with respect to all unpaid claims for losses arising from a single occurrence.

Policy deductibles are applied to the total amount of the insured loss.

Pacicc will also refund 70% of the unearned (unexpired) portion of your premium calculated from the date of the wind-up order. The maximum pay out is $700 per policy.

If you choose to be compensated by PACICC, you must assign your claim to PACICC. If your claim exceeds the PACICC limits of $250,000 and $700, you may eventually be reimbursed for all or part of the shortfall from funds released by the liquidator. Pacicc, however, will have to be reimbursed for the moneys it has paid to you before you will receive more.

For example, if PACICC pays you $250,000 on an agreed-upon claim of $400,000 and eventually recovers $300,000 from the liquidator, PACICC will pay you a further $50,000, bringing your total recovery to $300,000. However, if the recovery were to be $400,000 from the liquidator, you would receive full payment of your claim. Similarly, if PACICC pays you $630 in respect of an agreed-upon claim of $900 (0.7 x $900 = $630) for the unexpired portion of your premium and PACICC eventually recovers $900, PACICC will pay you the additional $270.

An important advantage of compensation by PACICC, is prompt payment... avoiding the potentially lengthy delay before the liquidator is able to pay any part of your claim. Of course, you may claim directly from the liquidator, if you wish.