Rhode Island Property & Casualty Insurance Guaranty Association
What is the Rhode Island Property & Casualty Insurance Guaranty Association (RIPCIGA)?
RIPCIGA is part of a non-profit, unincorporated, state-based statutorily created system that pays certain covered claims of insolvent insurance companies' policyholders and claimants. Guaranty associations exist in every state. The state law requires that all licensed property and casualty insurance companies that write covered lines of insurance in the State of Rhode Island be a member of RIPCIGA.
A separate guaranty system exists for insurers that write life and health insurance and annuities. RIPCIGA handles only certain property and casualty matters.
What is the role of the RIPCIGA?
RIPCIGA is designed to ease the burden on policyholders of and claimants against an insolvent insurer, by stepping in to assume responsibility for covered claims following the insolvency. The coverage RIPCIGA provides is fixed by policy language and state law; guaranty associations do not issue insurance policies. If your company is declared insolvent, it is incumbent on you to secure a replacement policy.
By virtue of the authority given to RIPCIGA, it is able to provide payment of covered claims up to the limits set by the policy or by statute, whichever is less.
Where does RIPCIGA get the money to pay the claims?
RIPCIGA is funded by assessments of member insurers following an insolvency.
What kinds of insurance policies are protected by RIPCIGA?
Most property and liability insurance policies written by insurers licensed in the State of Rhode Island, such as auto, homeowner's, and workers' compensation are protected. RIPCIGA does not cover life, annuity, health or disability insurance, mortgage guaranty, financial guaranty or other forms of insurance protecting against investment risks, fidelity or surety bonds, credit insurance, insurance of warranties or service contracts, title insurance, ocean marine insurance except that portion of the marine protection and indemnity insurance covering liability of the insured for personal injury, illness, or death to employees and insurance covering pleasure craft, insurance provided or guaranteed by the government, and certain other types of insurance.
Is there a limit to what RIPCIGA will pay?
Generally, yes. Most claims pay up to the policy limits or $500,000, whichever is less for all covered claims for insolvencies occurring on or after January 1, 2008, and $300,000 for all covered claims for insolvencies occurring prior to January 1, 2008. For workers' compensation claims, there is no limit. In addition, all other available insurance must be exhausted before RIPCIGA will become obligated on any covered claim.
What about any premium I've already paid for the policy that is now cancelled before its original expiration period?
In most instances, RIPCIGA will refund the amount of the policyholder's paid but unearned premium up to a maximum of $10,000 per policy.
Before my company was declared insolvent, it was defending me in a lawsuit brought under my policy. What happens now?
If the company is already defending the case, in most insolvencies RIPCIGA will take control of the case and will continue to defend the suit or negotiate a settlement on your behalf, subject to the limitations in the insolvency statute about coverage.
IF THERE IS ANY INCONSISTENCY BETWEEN INFORMATION PROVIDED HEREIN AND ANY LAW OR REGULATION, THEN SUCH LAW OR REGULATION, OR ANY INTERPRETATION OF THE LAW OR REGULATION BY THE COURTS, WILL CONTROL.