BUFFALO, N.Y. — Fallout continues after an insurance provider has started to close down business. Thousands across New York are now in the throes of trying to find replacement policies.
It's been jarring for some of those who have had insurance through the Adirondack Insurance Exchange. Some who did say it's not time to press the panic button, but to expect some hiccups as this continues to unfold.
"Well, it kind of throws everything into flux with that because it has a huge trickle-down effect," said David Kirst, who runs the insurance and ops side of the house for AAA out of his Amherst office in the Buffalo suburbs. "One of our carriers that specializes in insurance for New York went from averaging about 500 policies a week to over 1,200 policies a week, as they're going through this."
What may not seem like much in the grand scheme of the entire state, north of 7,000 customers across upstate and Western New York customers ripples hard.
"[It is] all the way from the individual insured to the insurance companies to insurance agents like ourselves here at AAA," he added.
Agents and brokers like Kirst's office to the Doug Neil Insurance Agency in the Capitol Region have been in overdrive.
"We have, since July, put a team together that John Graham is leading that literally have been working solely with Adirondack clients that are coming in early [and] staying late nights to get people in to get the insurance moved to other carriers that we work with," said insurance agent Vicky Pepaj.
This comes as Adirondack's rates were low, which is great for customers, but as Pepaj and Graham note, may have cost the company.
"Essentially that's maybe a little too little, too late as far as the money in versus money out," said Graham. "I could see the Department of Financial Services increasing their scrutiny over carriers and just making sure that [they are] giving them a stress test, so to speak, as far as making sure they can adequately stay solvent."
It means insurance companies are going to have to sort through potential new customers as it is a business of risk.
"Other carriers have to decide how they're going to take on these new risks and determine how they're going to price it [and] if they're willing to take it," said Graham.
"Standard deductible for a home is around $1,000," Pepaj said. "We have carriers now that are at $2,500."
With months until the official cutoff of policies and services, the task continues to get everyone under a new umbrella.
"[It is] very scary," she noted. "I mean, personally, just as an ad agency. It's an eye opener that insured need to take more of a responsibility. If they're not already, [they need] to know what they're purchasing and know their coverages that they have."
The good news is either directly through other carriers or your friendly neighborhood agents...
"We were initially shocked, but then again, what is our game plan?" Pepaj asked. "What do we do? How do we help people that are in this situation?"
"That's the good thing about having multiple insurance carriers, is we're able to do a lot of that legwork for that customer," Kirst said. "[We] shop their shirts around for them [and] make sure that they have the proper coverages, but also at the best possible rates."
Customers who will be shopping around to replace their coverage may be in for some sticker shock, but one of the other biggest takeaways is going to be if that's not taken care of in the next six months. A lapse in coverage makes finding replacement policies way more of a hassle and a financial burden.
Adirondack Insurance Exchange has posted a notice on their website:
"In follow-up to previous communications regarding the financial deterioration of Adirondack Insurance Exchange (AIE), AIE has begun the process of winding down its insurance business and will no longer be providing insurance coverage after the end of the year. The company is engaged in an orderly wind down with the New York Department of Financial Services so individuals have time to find alternative coverage. Claims will continue to be covered while policies remain in force. We encourage customers to contact their independent agent now to identify options for replacement coverage. If your policy is cancelled prior to the expiration date, you will be issued a pro-rated refund for any paid premium covering the period after cancellation. We will be providing monthly communications to support the transition."
