CATASTROPHE AND MARKET: WHEN THE INSURER FAILS

What happens to your homeowners insurance if your insurance company goes bankrupt?

A failed homeowners insurer is liquidated by a state court, not reorganized in federal bankruptcy, and the state guaranty association then pays the covered claims its policyholders still hold, most often up to $300,000 per claim. The policy is cancelled on a date the receiver sets, so replacement coverage has to be in place before then, and a surplus lines policy is usually outside the system altogether.

Disclaimer: Published statutes and association pages, not a quote and not legal or insurance advice. This page is general information. Your premium will differ based on your home, location, claims history, and insurer, and your own policy and state law control. Flood insurance is separate from a standard homeowners policy.

The cap decides how much of a big loss survives. Suppose a fire leaves the insurer owing $397,500 on a house. On a Florida homeowners policy the statute lets the association pay all of it. In most states the association stops at $300,000 and the owner files a claim in the liquidation for the other $97,500. In Oklahoma it stops at $150,000, and in Tennessee at $100,000.

Liquidation, not bankruptcy: the order that starts the clock

NCIGF notes that many federal statutes, including the bankruptcy laws, do not apply to insurers. Insurance is regulated state by state, and when a company's assets cannot cover its policy obligations, the state insurance commissioner takes control through the courts. The National Conference of Insurance Guaranty Funds (NCIGF) describes the ladder: an order of supervision, which usually changes nothing for policyholders; an order of suspension, which stops new business; rehabilitation, where the commissioner runs the company while trying to fix it; and, if the problems cannot be fixed, an order of liquidation. Under liquidation the commissioner becomes the liquidator and appoints a receiver, who takes the company's records and assets, tells policyholders how to file claims against the estate, and tells them the date on which their policies will be cancelled.

The guaranty association does not enter at the first sign of trouble. NCIGF says the guaranty laws in most states apply only after a court issues an order of liquidation with a finding of insolvency. A company in rehabilitation can still be paying claims, delaying them or paying them in part, and the association stays out of it. Florida's definition is the strict version: an insolvent insurer is a member insurer authorized to transact insurance in the state against which an order of liquidation with a finding of insolvency has been entered and has become final by the exhaustion of appellate review (Fla. Stat. 631.54(8)). A homeowner whose insurer is in rehabilitation therefore has a different problem from one whose insurer is in liquidation: claims may be slow, but the policy usually keeps running and the association is not yet involved.

The association itself is a nonprofit that state law creates and that every licensed property and casualty insurer must join as a condition of doing business. It is funded by assessments on the solvent members and by whatever it recovers from the failed company's estate. It steps into the failed company's shoes: the Florida statute makes it "deemed the insurer to the extent of its obligation on the covered claims," holding the rights, duties and defenses the insolvent insurer had (Fla. Stat. 631.57(1)(b)), and Arizona's statute says the same in nearly the same words (A.R.S. 20-667(C)). The practical meaning is that your policy still decides what is covered. The association does not rewrite a deductible, a wind exclusion or a depreciation schedule. It pays what the insurer owed, up to the statutory cap.

Florida's association reports that it has supported more than 87,280 Floridians with automobile and property damage claims, that six recent liquidations are listed on its insolvency page, and that it has had no new carrier insolvency since February 2023. That description is deliberately generic: the run of Florida property insurer failures that ended in early 2023 was a visible test of the system, and it left a mark on policyholders' bills, covered further down. The point for any state is the order of events. Trouble, then supervision or rehabilitation, then a liquidation order, then a cancellation date and a claims process run by the association.

Thirty days of continued claims, and a cancellation date you do not control

A liquidation order does not freeze your policy on the spot, and it does not keep it alive for the rest of the term either. The guaranty statutes draw a window. Arizona's fund is "obligated solely to the extent of the covered claims" that exist before the determination of insolvency and arise within thirty days after it, or before the policy's expiration date if that comes sooner than thirty days, or before the insured replaces the policy or cancels it, if the insured does so within thirty days (A.R.S. 20-667(A)). Florida's text has the same three branches (Fla. Stat. 631.57(1)(a)1). Most of the statutes cited here use thirty days, among them New Hampshire (RSA 404-B:8), Ohio (R.C. 3955.08), Oklahoma (36 O.S. 2007), Nevada (NRS 687A.060) and Wyoming (W.S. 26-31-106). Rhode Island's window is sixty days (R.I. Gen. Laws 27-34-8), and Virginia's is longer still: covered claims that arose before the earliest of ninety-one days after the determination of insolvency, the policy expiration date, or the date the insured replaces or cancels the policy (Va. Code 38.2-1606). The receiver's notice states the dates that apply to your policy. NCIGF puts the general working rule in a sentence: to be covered, a claim must be unpaid and must exist before the insolvency or arise within thirty days after the order of liquidation.

On a hypothetical calendar, a court enters a liquidation order on March 1, and the receiver's notice cancels policies effective March 31. A kitchen fire on March 20 is a loss that arose inside the window, under a policy still in force, and it is a covered claim. A fire on April 10 is a loss after the policy ended, and nobody owes anything on it. The same logic explains why NCIGF tells policyholders not to wait for the cancellation date: if you replace the policy on March 10, claims from that day forward belong to the new insurer, and you can cancel the old policy early to avoid paying twice. NCIGF says the typical time to replace coverage is fifteen to thirty days after the insolvency, and that the receiver will state the exact period for your company.

A claim that was already open when the order arrived is a separate and more comfortable situation. It exists before the insolvency, so it falls inside the window, and the association takes over the file. NCIGF advises that people with an open claim should begin finding replacement coverage right away because they may meet more resistance from new insurers, and it suggests telling the prospective insurer or the FAIR plan that the open claim may be resolved by the guaranty association. Our guide to being dropped after a claim covers the ordinary version of that resistance, and the CLUE report guide shows what a new insurer will see in your claims history.

Which state's association pays depends on where the loss sits. NCIGF says that in most instances the association in your state of residence handles the claim, and that a claim for property in another state goes to that state's association. Florida's nonduplication statute is more specific for homeowners: a person with a claim recoverable from more than one association seeks recovery first from the association of the insured's residence, "except that if it is a first-party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property" (Fla. Stat. 631.61(2)). A Minnesota resident with a vacation house in Florida would therefore look to Florida for a Florida fire.

What a covered claim leaves out

The statutory definition is the real policy limit. Florida defines a covered claim as "an unpaid claim, including one of unearned premiums, which arises out of, and is within the coverage, and not in excess of, the applicable limits of an insurance policy" issued by an insurer that becomes an insolvent insurer, where the claimant is a Florida resident or the property is permanently located in Florida (Fla. Stat. 631.54(4)). Four consequences follow, and each one shows up in a different part of a homeowners claim.

First, the association never pays more than the policy would have. Florida says it "may not be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy" (Fla. Stat. 631.57(1)(a)4), and Arizona says no more than the face amount of the policy (A.R.S. 20-667(B)). A dwelling limit of $280,000 makes a $300,000 cap irrelevant. The lesser of the policy limit and the statutory cap governs, which is how NCIGF frames it.

Second, the policy's own mechanics survive. The Florida association's FAQ says its former $100 deductible was "in addition to any deductible identified in the policy," so the policy deductible always applied. Its FAQ also explains that replacement cost coverage is generally triggered only when property is actually replaced, with actual cash value paid first and the rest after proof of replacement, and that where a dwelling is a total loss the Coverage A portion is usually paid in full. Our recoverable depreciation guide covers the holdback in detail. Nothing in the guaranty system turns an actual cash value policy into a replacement cost policy.

Third, penalties are out. The Florida association is not liable for "any penalties or interest" (Fla. Stat. 631.57(1)(b)). NCIGF adds that claims for punitive damages and amounts above policy limits are not covered. A homeowner whose insurer delayed payment before failing cannot collect interest for the delay from the association.

Fourth, some categories are carved out by name. Florida's definition excludes amounts due to reinsurers and other insurers on a subrogation or contribution basis, claims another state's guaranty fund has rejected under its own exclusions, and any amount payable for a sinkhole loss other than testing the association deems appropriate or the actual repair of the loss, with no attorney's fees or public adjuster's fees on sinkhole claims (Fla. Stat. 631.54(4)(a) to (c)). A sinkhole claim from a failed insurer therefore pays for repair, not a cash settlement. Several states also exclude first-party claims by insureds whose net worth exceeds a set amount, such as $50,000,000 in Maryland (Md. Insurance 9-301), $25,000,000 in Minnesota (Minn. Stat. 60C.09) and $10,000,000 in Delaware (18 Del. C. ch. 42); those clauses were written for corporate policyholders and do not touch a homeowner.

Other insurance is handled differently from state to state, and the difference matters when two policies respond to one loss. Florida provides that a person with a covered claim who also has a claim under another policy "shall not be required to exhaust first her or his rights under such a policy," and reduces the association's payment by any recovery under the other policy (Fla. Stat. 631.61(1)). Maine requires the opposite: a person with a covered claim who has a claim under another policy "shall be required to exhaust first the person's right under the policy" (24-A M.R.S. 4443(1)). The scenario is narrow, for example a condominium owner whose loss falls under both a personal policy from a failed insurer and the association's master policy, but in Maine the master policy pays first and in Florida it need not.

Flood is separate here too. A standard homeowners policy does not cover flood, so there is nothing for the association to take over; flood coverage under the National Flood Insurance Program is a federal policy and is unaffected by a private insurer's failure. Our flood insurance guide explains why the policy sits outside every number on this site.

Where the $300,000 rule holds, and where it does not

NCIGF calls $300,000 the most common limit, and the table agrees: 27 of the 46 rows state a flat $300,000 for an ordinary property claim, from Alabama and Arizona to Wyoming, and Florida's base figure is the same. Above that sit ten rows at $500,000 (Alaska, Connecticut, Delaware, Florida's homeowners structure-and-contents ceiling, Illinois, Iowa, Louisiana, North Carolina, Vermont and Wisconsin's property aggregate), one at $600,000 (Oregon, for insolvencies on or after January 1, 2025), four at $1,000,000 (California for a dwelling, Massachusetts and Rhode Island for first-party property loss from one occurrence, New York for any claim) and one that stands alone. Michigan's statute sets the cap at "$5,000,000.00" and indexes it to the consumer price index each January 1, so the live figure is somewhat higher; the table gives the statutory $5,000,000, and the current indexed figure is not published on the legislature's page.

Below $300,000 are three states, and for a homeowner they are the cautionary rows. Tennessee's association states on its own FAQ that the limit is generally $100,000, using a house fire as its example. New Mexico's act limits individual covered claims to $100,000 and a claimant's total per occurrence to $100,000, though the superintendent may set a higher figure by regulation. Oklahoma's Title 36 sets $150,000 per claimant. In those states a $397,500 fire leaves the owner with a six-figure gap, and the owner's insurance decisions before any failure matter more: a policy with a $450,000 dwelling limit from a failed insurer does not turn into $450,000 of protection.

Three of the higher caps are recent and date-keyed. Oregon's moved from $300,000 to $600,000 for insolvencies on or after January 1, 2025 (ORS chapter 734, sections 734.510 to 734.710). Rhode Island's public laws of 2025, chapters 452 and 453, enacted July 2, 2025, add $1,000,000 for all first-party property loss claims from one occurrence under a residential or commercial property policy for insolvencies after January 1, 2026; the codified section on the General Assembly's site still shows the older $500,000 text, so the public law is the cite. Massachusetts moved to $1,000,000 for first-party property loss and $500,000 for other claims for liquidations commencing on or after January 1, 2023, under Acts of 2024, chapter 389. Because the date is the liquidation order and not the loss, a Rhode Island homeowner whose insurer was liquidated in 2024 sits under the old $500,000 cap even though the state has since raised it.

California and Florida write homeowners-specific rules. California treats each loss under a different coverage category of a residential property policy as a separate covered claim, and its association's own page lists Coverage A at replacement cost up to $1,000,000 or the policy limit, with Other Structures, Personal Property and Loss of Use each paid at actual cash value up to $500,000. Florida's statute adds $200,000 for "the portion of a covered claim which relates only to the damage to the structure and contents" of a homeowner's policy, on top of the $300,000 base (Fla. Stat. 631.57(1)(a)2), and a separate rule gives condominium and homeowners' association policies up to $200,000 multiplied by the number of units. The statute defines homeowner's insurance narrowly: personal lines residential policies written to the individual homeowner, excluding mobile homes and renter's or tenant's coverage (Fla. Stat. 631.54(7)). A Florida mobile home policy therefore gets the base $300,000 and not the extra $200,000. Reading the statute as written, the structure-and-contents portion of a Florida homeowners claim can reach $500,000, which is why Florida appears in the $500,000 tier.

Wisconsin runs differently again. Its fund is a state "Insurance Security Fund," the base is $300,000 for a single risk, loss or life, and the aggregate for property, liability and disability benefits can reach $500,000 (Wis. Stat. 646.31(4)(ap)). New York's fund is also state-run and caps any one claim at $1,000,000, and its separate $5,000,000 aggregate applies to New York residents' policies that insure risks outside the state.

Two kinds of minimum: a threshold and a band

The claim-minimum column hides a distinction that changes the check you receive. In a threshold state, a claim at or below the threshold is not covered at all, and a claim above it is paid from the first dollar. California says a covered claim does not include a claim of $100 or less, and Ohio excludes a claim that does not exceed $100; a $5,000 claim in either state is paid as $5,000. New Hampshire (more than $50) and New Mexico (more than $25) define a covered claim as one above a floor, which reads the same way.

In a band state, the statute pays only the slice of the claim between the minimum and the cap. Arizona's association pays "that amount of each covered claim that is more than one hundred dollars and that is less than three hundred thousand dollars" (A.R.S. 20-667(B)); Maryland ("in excess of $100 and less than $300,000"), South Carolina ("in excess of two hundred fifty dollars and is less than three hundred thousand dollars"), Washington ("in excess of one hundred dollars and is less than three hundred thousand dollars"), Connecticut and North Carolina use the same construction. Read literally, a band state's top payment is the cap minus the minimum, so $299,900 in Arizona, Maryland and Washington, $299,750 in South Carolina and $499,950 in North Carolina. Louisiana's act sets a "minimum limit of one hundred one dollars" per claim, and the statute does not say whether the first $100 comes off a larger claim; this page treats Louisiana as a threshold state and flags the wording.

Most states list none. Florida removed its $100 deductible for claims against companies liquidated on or after July 1, 2021, according to the Florida association, which still applies it to claims from companies liquidated before that date. The NCIGF sheet still shows Florida at $100. It also showed a $100 minimum for West Virginia and $250 for Wyoming; the sections cited here (W. Va. Code 33-26-5 and 33-26-8; W.S. 26-31-103 and 26-31-106) contain no minimum, and the $250 appears to be Tennessee's unearned premium threshold sitting in the wrong row. The sheet gave New Hampshire none and the New Hampshire statute defines a covered claim as one "in excess of $50."

Admitted or surplus lines: the question that decides whether any fund applies

Guaranty associations are built from the licensed market. NCIGF answers the question directly: "Guaranty associations cover only licensed insurers. Companies not licensed in the state, surplus lines carriers, managed care plans, preferred provider organizations (PPOs), Health Maintenance Organizations (HMOs) and self insured plans are not covered under the property and casualty guaranty association statutes." Someone who bought from one of those entities can file a claim with the liquidator, which is a claim against the estate and not a guaranteed payment. The Florida association says the same in its FAQ, adding that surplus lines insurers "are not members of FIGA and therefore are not eligible for FIGA coverage," and tells readers to check the regulator's company search for an authorization type of "Certificate of Authority."

The statutes carry that rule in their definitions, not in a headline exclusion. The statutes cited here define "insolvent insurer" or "member insurer" as an insurer licensed or authorized in the state, with wording such as "licensed to transact insurance in this state" (Minnesota, Rhode Island, Wyoming), "authorized to transact insurance in this state" (Oregon, Washington), or a "certificate of authority" (Texas, Idaho). A few are explicit about surplus lines. Virginia's covered claim "shall not include" any amount due under any policy originally issued by a surplus lines carrier or risk retention group (Va. Code 38.2-1603). New Mexico's article does not apply to "surplus line and other coverages written by insurers other than authorized insurers" (NMSA 59A-43-3). Arizona's member insurer definition excludes writers restricted solely to surplus lines insurance. Missouri says a company not licensed in the state shall not be a member insurer. Florida goes one step further and makes the point at the point of sale: every surplus lines policy must carry on its first page the words "PERSONS INSURED BY SURPLUS LINES CARRIERS DO NOT HAVE THE PROTECTION OF THE FLORIDA INSURANCE GUARANTY ACT TO THE EXTENT OF ANY RIGHT OF RECOVERY FOR THE OBLIGATION OF AN INSOLVENT UNLICENSED INSURER" (Fla. Stat. 626.924(1)).

There is at least one exception to "generally not covered." New Jersey runs a separate New Jersey Surplus Lines Insurance Guaranty Fund, established in 1984 under N.J.S.A. 17:22-6.70 and following. Its own page says that since June 25, 2002 the fund covers only eligible surplus lines insurers issuing medical malpractice liability insurance or property insurance for owner-occupied dwellings of fewer than four units. That is a dwelling insurance backstop for the one segment of the surplus market most relevant to this site's readers. The fund's dollar limits and eligibility conditions come from its own statute and are not stated here; New Jersey's main association is also one of the five states not in the table. NCIGF's own FAQ says only that "there may also be other guaranty associations that may provide coverage" for these policies, which is a reason to ask the state regulator before assuming a surplus lines policy is bare.

How do you know which kind of policy you hold? Three places usually tell you. The declarations page or policy cover often names the company and states whether it is admitted; Florida's mandatory stamp is the clearest example. The state insurance department's company lookup lists admitted insurers and their authorization type. And the agent who placed the policy knows whether it went through the regular market or a surplus lines broker. Homeowners who cannot find coverage in the regular market are the ones who may end up with a surplus lines policy, so they are also the ones who may learn about this carve-out at the worst time. Our guides to FAIR plans and Florida Citizens describe the state-run alternatives, which are separate programs and not guaranty association members.

The unexpired premium: what comes back, and what the cap leaves behind

When a court cancels a policy, the unearned part of the premium is a covered claim. The Florida association explains the arithmetic: if a customer pays for a year of coverage and the policy cancellation date comes three months later because of the insolvency, the association refunds 75 percent of the payment. On a hypothetical $2,400 annual premium, that is $1,800. The Florida association also says that policyholders are refunded only for the portion of the premium collected by the insolvent company, that the receiver treats unearned premium claims as automatically filed so no action is needed, and that refunds are generally paid within 90 days of an insolvency. NCIGF says elsewhere that payment can take weeks or months while data moves from the receiver to the association.

The caps differ widely, and they appear in the statutes and in a separate NCIGF unearned premium information sheet. The table's last column gives what each statute says. Twenty of the 46 rows cap the refund at $10,000, per policy or per claim, a few go to $25,000 (Maine, Missouri, South Dakota, Texas) or $50,000 (Illinois, Massachusetts), Wyoming stops at $7,500, Connecticut pays half of the unearned premium to a maximum of $2,000, Minnesota allows the whole claim up to $300,000, and Michigan covers only the first $500 of unearned premium per person per insolvent insurer, indexed. Those caps rarely bite on an ordinary homeowners premium, but small thresholds do. Iowa does not refund the first $100; Maine refunds only the excess over $50; Virginia pays only the part over $50; South Carolina and Utah's personal lines rule start at $100; Tennessee's statute, as reproduced on the association's claimants page, starts above $250.

One hypothetical shows the spread. Take a $3,600 annual premium paid in full, and a policy cancelled 90 days into a 365-day term. The unearned portion is $3,600 times 275 over 365, or $2,712.33.

The arithmetic, by hand: 365 minus 90 is 275 unused days; 3,600 times 275 is 990,000; divided by 365 gives 2,712.33 to the cent. Maine and Iowa subtract $50 and $100. Connecticut halves it (1,356.164) and the half sits under the $2,000 limit. Michigan's $500 limit leaves 2,712.33 minus 500, or $2,212.33. These are readings of the statutes on a made-up premium and cancellation date, not predictions: the receiver's records and the association's method decide the real number, and the amounts left over can be claimed in the liquidation, with no promise of payment. If your lender paid the premium out of escrow, ask the servicer who is entitled to the refund, and see our escrow guide for how premium payments flow through the account.

A $397,500 loss against a $300,000 cap, worked in dollars

Everything in this example is a stated assumption, not a real claim. A house has Coverage A of $450,000 on a replacement cost form. A fire causes $400,000 of covered repair cost, the repairs are complete, so no depreciation holdback remains, and the policy has a flat $2,500 deductible. The insurer is then liquidated, and the claim is open when the order arrives, so it is a covered claim inside the window.

Step one is the policy. The insurer owed $400,000 less the $2,500 deductible, or $397,500, and that is below the $450,000 limit, so the policy limit does not bind. Step two is the statute: the association's obligation is the smaller of what the insurer owed and the cap, after any state minimum. The same $397,500 gives the following results.

The arithmetic, by hand: 400,000 minus 2,500 is 397,500. For the flat cap, 397,500 minus 300,000 leaves 97,500, and adding the 2,500 deductible gives 100,000. For the band, 300,000 minus 100 is 299,900; 397,500 minus 299,900 is 97,600; add 2,500 for 100,100. Florida and the $500,000 states pay the full 397,500 because it is under their ceilings, leaving only the deductible. Oklahoma leaves 397,500 minus 150,000, or 247,500, plus 2,500 for 250,000. Tennessee leaves 397,500 minus 100,000, or 297,500, plus 2,500 for 300,000. Florida's row assumes the entire loss is structure and contents of a homeowner's policy as the statute defines it, and uses the $300,000 plus $200,000 text as written; the Florida association's own FAQ describes the extra amount as "an additional $200,000."

The deductible does not move across the rows because it is a feature of the policy, and all the difference comes from where the home sits and when the insurer was liquidated. The unpaid balance is not extinguished. NCIGF says a claimant whose claim exceeds the association's maximum may file a claim for the unpaid portion with the liquidator, and the Florida association says the same about amounts over its cap. What the estate eventually pays is unknown and may be a small fraction. Nothing on this page predicts a dividend.

The example is calibrated to the $300,000 headline, not to any ranking of states. In real life many losses are small, and for them the cap never enters. The cap matters in total losses of expensive houses, and that is also where the Coverage A limit is highest and the underwriting decisions made years earlier matter most. Our dwelling coverage worksheet covers the limit side of the arithmetic.

The mortgage lender's seat at the table

If a mortgage is on the house, the lender is almost always named in the policy as mortgagee, and the cap does not reduce the loan. The ISO HO-3 sample's Mortgage Clause says that "any loss payable under Coverage A or B will be paid to the mortgagee and you, as interests appear," and that if the insurer denies your claim, the denial "will not apply to a valid claim of the mortgagee" when the lender has met conditions such as notifying the insurer of changes it knows about and filing a sworn statement of loss within 60 days after notice (HO 00 03 10 00, Section I Conditions K). Because the association is "deemed the insurer to the extent of its obligation," those policy terms carry over to the association's payment: a dwelling check from the association will name the lender alongside the owner.

Suppose the lender is owed $320,000 in the $300,000-cap row. The association's $300,000 does not satisfy the loan, and the owner still owes the lender the full balance whatever the claim pays. How the lender releases the money to the contractor, in stages or at once, comes from the loan documents and not from the guaranty statute. Our guides to the mortgage company claim check and to force-placed insurance cover the mechanics. Two points belong here. The lender will require continuous coverage, so a cancellation date without replacement coverage can lead the servicer to buy a lender-placed policy at the owner's expense. And the HO-3 sample's Mortgage Clause promises the mortgagee at least 10 days' notice of a cancellation or nonrenewal decided by the insurer; a cancellation in liquidation comes from the court order and the receiver's notice, so ask the servicer what it has received.

Who funds the safety net, and the surcharge on your renewal

The money for covered claims comes from assessments on solvent insurers, who pass part of the cost to customers. Florida's association is the clearest public record. Its regular assessment is capped at 2 percent of net direct written premium, with up to 2 percent more in emergency assessments for hurricane-related insolvencies. It levied 0.70 percent on policies effective January 1 through December 31, 2022, 1.3 percent on policies effective July 1, 2022 through June 30, 2023, and 0.70 percent on policies effective in 2023; the levies were additive, so policies effective from July 1, 2022 through June 30, 2023 carried a combined 2.00 percent. A further 1.0 percent emergency assessment, labelled 2023A, ended on September 30, 2026, ahead of its original schedule, because collections exceeded projections. The surcharge appears on the declarations page, where the association recommends a line labelled "FIGA Assessment Surcharge," and the association describes Fla. Stat. 631.64 as the disclosure rule that has members show the surcharge separately on premium statements. Surplus lines policies do not carry it: the association states that its assessments apply to admitted policies only.

So the insolvency wave cost every Florida admitted-market policyholder money, whether or not their own insurer failed. For a $300,000 dwelling policy with a $4,000 premium, a 2 percent surcharge is $80, an illustration of the order of magnitude and not a quote. The surcharge is a reason a premium can rise without a rate change; our renewal decoder lists the other lines to check. Other states fund their associations in the same pattern, though the percentages, the caps and the pass-through rules differ.

Getting new coverage while the estate sorts itself out

Everything else on this page happens slowly, and the replacement policy cannot. NCIGF's advice is blunt: contact your agent as soon as the receiver's notice arrives, do not wait for the cancellation date, and if you cannot find coverage through ordinary channels, ask about your state's FAIR plan. The guaranty association does not sell or replace policies. The receiver gives the date, and NCIGF puts the typical window at fifteen to thirty days.

An open claim complicates shopping, as noted above, and so can a recent claim paid before the failure. Insurers see claims history through the CLUE database, and a house with a fresh water or fire loss may not qualify for standard coverage. A FAIR plan policy is a bridge, not a full replacement, because many such plans write fire-type coverage with gaps; the FAIR plan guide lays out the coverage gap line by line, and in Florida the Citizens guide describes eligibility and takeout offers. A cancellation caused by insolvency is a different event from an underwriting cancellation or nonrenewal, which carry notice rules and review rights; the nonrenewal guide covers those and the catastrophe and market section gathers the related guides.

Two documents are worth locating before any notice arrives. The first is the declarations page, which names the insurer and the dwelling limit. Our declarations page guide shows where the company name and any surplus lines wording appear. The second is your claim file, if one is open: the adjuster's name, the claim number and every estimate, because the association will ask for them and you can supply them before its records arrive from the receiver. Our guide to filing a homeowners claim covers building that file.

Insolvency and your policy: questions and answers