What happens if my insurance becomes insolvent?
January 12, 2022 | 40,00 EUR | answered by Katrin Sontheimer
Dear Insurance Law Attorney,
I am reaching out to you because I am very concerned about my insurance. My insurance company has been facing financial difficulties lately and there are rumors of a possible insolvency. As a long-time customer with various insurance policies with this company, I am worried about the security of my insurance benefits in case of insolvency.
The situation is that I have been paying my insurance premiums on time for years and have trusted that my insurance will be there for me in case of a claim. However, I have heard that in the event of an insurance company's insolvency, not all benefits are guaranteed and customers may potentially lose part of their claims.
I am worried that in the event of my insurance company's insolvency, my personal financial security could be at risk. Therefore, I am wondering what steps I can take to protect my interests and what rights I have as an insurance customer in such a situation.
Can you please explain to me what happens if my insurance becomes insolvent and how I can best prepare myself? Are there ways to secure my claims and what protection do potentially existing security systems for insurance customers offer?
I thank you in advance for your support and advice on this matter.
Sincerely,
Erwin Keck
Dear Mr. Keck,
I understand your concerns regarding the financial situation of your insurance company and the potential impact of insolvency on your insurance benefits. It is important to be well-informed in such situations and to know what steps you can take to protect your interests.
In the event of insolvency of your insurance company, there are certain mechanisms and security systems in place to protect the claims of insurance customers. In Germany, insurance companies are legally obligated to participate in security systems such as the Security Fund for Life Insurance or the Protector for Property and Casualty Insurance. These security systems are designed to ensure that in the event of insolvency of an insurance company, the claims of customers are at least partially secured.
If your insurance company becomes insolvent, the security systems will intervene and handle the claims of customers. The amount of compensation may vary depending on the type of insurance and the specific regulations of the security systems. However, it is important to note that not all claims may be fully covered. Therefore, customers may have to waive some of their claims in the event of insolvency.
To best prepare for a possible insolvency, I recommend reviewing your insurance policies and learning about the security systems in which your insurance company is involved. It may also be wise to consider alternative insurance options or seek advice from an independent insurance advisor.
Overall, you should be aware that in the event of insolvency of your insurance company, certain protective mechanisms will come into play to secure your claims. However, it is important to take early action and educate yourself about your rights and options to best protect your financial security.
I hope that my explanation is helpful to you and I am happy to answer any further questions you may have.
Best regards,
Katrin Sontheimer
Insurance Law Attorney
