If a claim has been settled against an insured under a policy from an insolvent insurer, what must a person do regarding other policies from solvent insurers?

When a claim has been settled against an insured under a policy from an insolvent insurer, it is necessary for the individual to exhaust all coverage provided by the solvent insurer. This means that the insured must seek to utilize any available benefits or limits from their other existing policies before expecting to receive any additional compensation from the claims related to the insolvent insurer.

Exhausting coverage is crucial because it ensures that the insured is maximizing their recoveries from all sources before looking to other options, such as potential claims against the insolvent insurer or any associations that may step in. This practice promotes fairness by allowing solvent insurers to manage their liabilities and helps maintain the integrity of the insurance system, as it reduces the burden on the funds available for insolvent policies.

Utilizing the benefits from solvent insurers first also aligns with principles of primary insurance coverage, where policyholders are expected to first access available coverage from policies that are currently in force and can meet the claim’s needs. This step is often part of standard operating procedures outlined in insurance regulations to prevent double dipping or overlapping claims from different insurers.

In summary, the correct approach after settling a claim against an insolvent insurer is to first make use of other policies from solvent insurers to ensure that all available coverage is utilized