State Guaranty Fund

A State Guaranty Fund is a state-mandated safety net that protects policyholders of “admitted” carriers. If an insurance company goes bankrupt or becomes insolvent following a catastrophic event, this fund steps in to pay outstanding claims (usually up to $300,000 or $500,000). For homeowners, verifying that their carrier is a member of this fund is vital, especially given the increased risk of carrier failures in volatile, disaster-prone regions across the United States.