insurance query

[steve]

Hi everyone,
I was wondering today, what would happen if your house burnt down the day your insurance company colapsed or you run into a shopping centre (one million dollars damage)the day your car insurance company goes belly up.On a brighter note have a good weekend.

steve

 

[BKH]

It depends on if the insurance company was Australian or a reputable overseas company. If it was an Australian there are strict regulations as to assets vs liabilities ratios. Strangely that did not assist with the HIH debacle. You would probably become a creditor and stand in line . However the govt may come to the party to some degreea s they did with HIH. Also there is reinsurance behind the Aust insurer so for the big loss you may have some secondary cover depending on the retention by the primary insurer, ie on motor it may be a figure between $100k to $1m. and some similar figure for household. IF the insurer was an overseas company say registered in the cayman Islands or Bosnia there is less guarantee of them sticking around if claims blow out.