Drivers are required to have car insurance policies to be in accordance with the law. However, several situations can cause insurance companies to drop clients. Still, most policyholders wouldn’t expect their company to go out of business and tell them to find new coverage. This is what thousands of drivers are currently experiencing. 

These drivers will need to find new car insurance policies

According to Syracuse, a New York-based company called Adirondack Insurance Exchange is telling customers they must find new car insurance policies as they are going out of business. This move comes as AIE has faced continued financial troubles and increased competition. Previously, the company sent letters to customers telling them to prepare as it starts “a transition plan for existing policies.

Regarding the increased competition AIE has faced, representatives for the company said it couldn’t keep up with “better-insulated firms… with rising rates on the reinsurance markets, or the backup insurance that all insurance carriers buy from large international firms.”

New York is the only state where the company offers car insurance policies. It will be entirely withdrawn from the market. It’s unclear how many customers the company has, but according to reports, it provides home and car insurance to at least 7,000 people in the state’s Capital Region. Though policyholders will need to find new coverage, they have a safety net thanks to the Property Casualty Insurance Security Fund the state has. This fund provides $1 million in coverage when insurance companies go out of business. 

AIE is a company managed by National General, which is a subsidiary of Allstate. For more reading, check out our recent article on the lawsuit National General is facing. The company is being accused of forcing drivers to add coverage to the car insurance policies they didn’t need.