It is not an over-statement to say Texas Insurance Companies make lots of money and profits. Many of these companies are based in or have big offices in Dallas and Fort Worth. Having said that, every few years one will go out of business. When an insurance company goes out of business it is usually the result of a natural disaster such as a hurricane effecting an area where they have a lot of policies issued. Not once has it been because of too many lawsuits.
So what happens if your insurance company goes out of business? In Texas, when an insurance company becomes insolvent, meaning its liabilities or debts exceed its assets, the company is placed in receivership by a state District Court Judge and this authorizes the Texas Commissioner of Insurance to take charge of the company.
So what happens to your insurance claim? In Texas, all licensed insurers must be members of the guaranty association for their particular type of insurance. There are associations for title insurance, life and health insurance, annuities, property and casualty, auto, and home, etc.
The purpose of the guaranty associations is to pay lawful claims made to the insurance company that has been placed in receivership. The thing to keep in mind is they will play games with you and give you a feeling of “hopelessness”. It has been our experience that it is definitly more difficult and time consuming, but in the end we have always been to get our clients situations worked out.
If you are in a situation where you are dealing with an insurance company in Texas who has been placed in receivership then you will need to see about getting an Insurance Law Attorney like Mark Humphreys to make sure your rights are fully protected. No matter where you are in the State of Texas and especially in Fort Worth, Dallas, Grand Prairie, Irving, Arlington, Weatherford, or the surrounding cities and towns you should give us a call and see if we can help.