Three Illinois Insurance Companies Placed in Liquidation

A recent report that three Illinois insurance companies were placed in liquidation (i.e. code for going out of business) reminded me of the consequences of Florida insurance companies going out of business. In Florida, if an insurance company goes out of business, or is found to not be able to cover all of its outstanding claims or obligations, Florida Insurance Guaranty Association, (or FIGA) steps in. All property insurance companies in the State of Florida must belong to FIGA. Property owners should note that FIGA states that they governed by state law, not the existing homeowner's insurance policy. This is very important as the two may differ significantly.