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Are there limits on the amount that guaranty funds will pay?

Yes. For liability claims, the amount the SDIGA will pay on a covered claim is limited to the amount of the insurance coverage provided by the policy or $300,000, whichever is less. These coverage “caps” are fixed by state law; the guaranty funds play no role in setting coverage caps. The SDIGA pays 100 percent of benefits to which a person is entitled for workers’ compensation claims.
The SDIGA also pays certain claims for “unearned premium,” which is premium an insured has already paid for a period of time for which the policy was cancelled due to the insolvency. The amount of that claim is calculated by the liquidator. The SDIGA is only responsible for the amount of an unearned premium claim in excess of $100 and no more than $25,000.
 



faq | by Dr. Radut