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HOME : Just the FAQs Ma'amHow Secure Is My Insurance Company?After the well-publicized collapse of Confederation Life, I am concerned about how safe my homeowners and automobile insurance money is, especially if I have a claim and the company goes bankrupt before I get paid. Would I still get my money? Worry no more! In the
unlikely event that your insurance company does go under, the Property and
Casualty Insurance Compensation Corporation (known as "PACICC"
for short) will come to your rescue! Although insurance
company failures are very rare, they can -- and do -- happen, as the
unfortunate policyholders of Confederation Life discovered. That is why
the property and casualty insurers -- those companies that sell insurance
for your homes, cars, and other property in Canada -- joined forces to
fund the PACICC program as protection against insolvencies. It's sort of
like insurance for your insurance, but you don't have to apply for this
protection -- it's extended automatically. If your insurer does
fail, the first thing you should do is contact your agent or broker to
have your policies replaced, so you will still have insurance protection.
This must be done within 45 days of the date of the court order declaring
the company bankrupt. If you purchased your
insurance directly from the company, rather than from an agent or broker,
and you have a claim pending, notify the company's head office. The
liquidator will write to all policyholders concerning claim procedures.
PACICC will consider claims for events that occurred on or before the date
of the bankruptcy, and for up to 45 days afterward. You may claim either
directly from PACICC or directly from the liquidator. The advantage of
claiming from PACICC is prompt payment. If you claim from the liquidator,
on the other hand, be prepared for a potentially lengthy delay before you
are paid any part of your claim. There are limits on
PACICC claims payouts, however. It will pay up to a maximum of $250,000
for unpaid claims for losses arising from a single occurrence. If your
claim exceeds $250,000, you may eventually be reimbursed for all or part
of the shortfall from funds released by the liquidator. PACICC will also
refund 70 per cent of the unexpired portion of your premium to a maximum
payout of $700 per policy, applicable from the date of the insurer's
collapse. Back to Confederation
Life: life insurance insolvencies are not covered by PACICC, but fall
under a similar program for life & health insurers, called "CompCorp."
So you can rest easy,
knowing that your policy and premium are protected. After all, insurance
is supposed to bring you peace of mind! As the song goes, "Don't
worry -- be happy." Even if all else fails, PACICC won't! |
