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Insureds Told To Find A New Carrier
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- On: 07/31/2024 10:22:33
- In: Latest News
An Upstate New York-based insurance company appears to be going out of business as it urges customers to find a new carrier.
“We regret to inform our agents and policyholders that our financial position has continued to deteriorate,” Adirondack Insurance Exchange said on its website. “We urge all current customers to begin working with their independent agent to secure new coverage with a rated carrier, immediately.”A letter was also sent to customers earlier this month, telling them to find new insurance coverage as it begins “a transition plan for existing policies.”
According to the Times-Union, the Buffalo-based company is withdrawing from the New York market entirely — the only state where it operates. It's unclear how many customers will be affected, but Adirondack Insurance Exchange had an estimated 7,000 home and auto insurance customers in the Capital Region alone.
The news comes weeks after Demotech, Inc., a provider of financial stability ratings of property-casualty insurance companies, said it withdrew its financial stability rating for AIE.
Industry experts told the Times-Union that Adirondack Insurance Exchange's troubles likely began with rates that were too low to keep covering claims and maintain required reserves. AIE also faced competition from “better-insulated firms... with rising rates on the reinsurance markets, or the backup insurance that all insurance carriers buy from large international firms.”
According to the Albany newspaper, AIE customers will still have protection under the state's “Property Casualty Insurance Security Fund,” which provides up to $1 million in coverage when an insurance company becomes insolvent.
https://www.syracuse.com/state/2024/07/upstate-ny-insurance-company-in-trouble-tells-customers-to-find-a-new-carrier.html?outputType=amp
Published: July 30, 2024 by Geoff Herbert | gherbert@syracuse.com