Austin Indemnity Auto Insurance

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Things to Remember...
  • Austin Indemnity Lloyds was liquidated due to financial hardship
  • Austin Indemnity Lloyds sold personal automobile coverage as well as homeowners insurance
  • Austin Indemnity Lloyds struggled to pay claims after the area was hit by hard times after hurricanes

An Austin Indemnity Auto Insurance review leads to a liquidation report from the Texas Department of Insurance.

Austin Indemnity Lloyds Insurance Company used to be a viable company selling insurance in the state of Texas.

Although Austin Indemnity Lloyds no longer sells auto insurance, you can receive many auto insurance quotes by entering your zip code now!

Austin Indemnity Liquidation

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On July 1, 2008, the company officially stopped renewing policies and a few weeks later, the company officially stopped selling new policies.

Policy holders were sent notification of the non-renewal policy but were not informed about the future of the company. This is a company practice, since claims will be backed by the state’s department of insurance.

At the time of the customer’s notices, the Texas Department of Insurance was notified so that, pursuant to Texas State Law, the department could oversee the passing of policies from Austin Indemnity to another company.

Many other companies began bidding for the right to purchase policies from Austin Indemnity. This too is a common practice. Some insurance companies exist solely to purchase struggling companies for a profit.

What ended in liquidation started two years before when Austin Indemnity had a particularly difficult year.

Many people in the Austin area who had policies with the company filed claims due to a minor hurricane, and the company did not have the means to pay for all of the claims without being hurt financially.

The board of directors tried to hold the company together for the next two years but the hard hit from the claims filed in 2006 was too much for the company to recover from.

The company was forced to file a Hazardous Financial Condition Order, and the Texas Department of Insurance then intervened.

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Austin Indemnity Liquidation Ramifications

The liquidation was moving along smoothly with the Texas Department of Insurance overseeing the transition when an unforeseeable event took place.

Hurricane Ike hit Texas and those still holding policies with Austin Indemnity filed claims. This would have been devastating for a financially stable company let alone a company in liquidation.

No other company had bought Austin Indemnity at that time so the responsibility was left to the Texas Department of Insurance.

The insurance department was dealing with the thousands of other claims being filed with other insurance companies. Since the department also handles complaints and issues with claims, it was overwhelmed.

Many people holding a policy with Austin Indemnity did not get their claims paid within the first year. Many others were still waiting two years later. This resulted in several law suits filed against Austin Indemnity by families and individuals waiting for their claims to be paid.

The company had completely liquidated at this time, but the money remaining from the liquidation was being sought after by those filing suit.

Austin Indemnity Auto Insurance Example

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When looking at the example of Austin Indemnity, there are some lessons to be learned that can help any consumer looking to purchase insurance avoid a similar situation.

  1. Always purchase from a company that is licensed with the state. Although, this did not immediately help in the Austin situation, it typically will give consumers a back up plan should their insurance company fold.
  2. Regularly check the financial rating of your insurance company through independent insurance rating companies. This can give you a forewarning when a company is struggling giving you the opportunity to end your policy and find another company.
  3. Ask questions when you receive a notice of non-renewal. Non-renewals are usually only sent for two reasons; either you are a bad customer and the company doesn’t want you anymore, or the company itself is a bad company and it is starting the selling off process. If you receive a notice, find out why.
  4. When you do receive a non-renewal notice, you don’t have to wait until your policy expires in order to look for a new auto insurance company. Keep your current company while you shop around.

As soon as you find another company that works for you, they will handle the canceling of your current policy simultaneously with the purchase of your new policy so there are no gaps in coverage.

To shop around and compare auto insurance rates from several companies right now, simply enter your zip code here!

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