Insurer Liquidated by CA Wildfires – Unable to Pay Claims
Read the entire article at CNN.
Merced’s assets are about $23 million, but it faced about $64 million in outstanding liabilities just in the city of Paradise. Judge Brian McCabe’s decision allows the California Department of Insurance to take control of Merced. According to court documents, the state’s Conservation & Liquidation Office will start liquidating what’s left of the company.
Unlike with bankruptcy, where a business or individual can start over, liquidation means there is no hope for a company’s recovery. Fortunately for Merced’s policyholders, they are covered by the California Insurance Guarantee Association, which “protects resident claimants in the event of an insurance company insolvency.”
But the association has maximum benefit limitations, according to Merced. “If it ends up that you have a claim in excess of CIGA’s limits,” the company said, “the excess will be a claim against the assets of Merced.”