If you are an Arizona resident insured by a licensed insurance company that becomes insolvent, part or all of your covered claims may be paid by an insurance guaranty fund.  Guaranty funds are established by state law to pay the covered claims of policyholders and other claimants of an insolvent insurance company.  Arizona has two guaranty funds:

  • The Arizona Property and Casualty Insurance Guaranty Fund covers most property and casualty insurance.
  • The Arizona Life and Disability Insurance Guaranty Fund covers life and health insurance, supplemental contracts and annuities.

Guaranty funds are funded through assessments levied against licensed member insurers to provide benefits when a court finds a member insurer to be insolvent and is orders the insolvent insurer to be liquidated.  The amount each licensed member insurer must pay depends upon how much of the same type of insurance it sells in Arizona.