Are insurance companies required to pay their claims?

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vasuderatorrent said:

Are insurers companies required to pay their claims if they don't have the cash on hand to do so?

For example: If a hurricane hits all policy holders within a hundred mile radius.
For example: They don't feel like paying your claim.
For example: Your situation is the one thing that isn't covered in your policy.

If this is true, What good is insurance?

vasuderatorrent

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Insurers are required to have "X" dollars in cash reserves. I don't know when an insurance company has gone bankrupt. The reserve requirements are non-negotiable.

If they "don't feel like paying your claim," your state's Dept of Insurance will act on your behalf. If they fail to do so, they'll have so much paperwork coupled with meaningful fines, they would rarely do that. It would have to be a misunderstanding.

If you're not insured for a particular loss, you don't get paid. That also is non-negotiable.

Insurance spreads the risk around; prevents people from going bankrupt and protects other people from the careless actions of others. And, of course, Mother Nature.