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Gap Insurance



  • I looked up the company via the California Dept. of Insurance, (Tip: always use a state insurance regulation web site to get preliminary info about a insurer.) The backing company, Western General, has operated in the state since 1973. Right now, the premiums earned vs. losses (and related expenses) related to underwriting put the company in a $2.6 million hole as of 3/31/13. The company appears to have sold some assets and is using its surplus pool to cover the loss ($20 million after deductions). According to their financial statement, the company's underwriting loss was $6 million for 2012.

    They're a small company. If they had $100 million in bonds, I'd feel better about their position. They have about $30 million in bonds, and $5+ million in cash.

    So based on the financial documents, they appear to be legitimate. I'd see what A.M. Best says about the company's financial stability. You can get the information for free if you register.
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