Key Takeaways
- VPCIGA protects Virginia policyholders when P&C insurers become insolvent
- VPCIGA covers claims up to $300,000 per claim for most covered claims
- Workers' compensation claims are covered at statutory limits
- VPCIGA does not cover surplus lines policies or self-insured plans
- Producers cannot advertise or use VPCIGA coverage as a selling point
Last updated: January 2026
Virginia Property and Casualty Insurance Guaranty Association (VPCIGA)
The Virginia Property and Casualty Insurance Guaranty Association (VPCIGA) protects Virginia residents when P&C insurance companies become insolvent.
Purpose and Function
VPCIGA:
- Protects policyholders of insolvent P&C insurers
- Pays covered claims up to statutory limits
- Funded by assessments on member insurers
- Operates under state law supervision
How It Works
When a P&C insurer becomes insolvent:
- Bureau of Insurance takes over - Places insurer in liquidation
- VPCIGA activates - Takes responsibility for covered policies
- Claims processed - VPCIGA pays covered claims
- Assessments made - Member insurers pay assessments
Coverage Limits
VPCIGA provides coverage up to specific limits:
Claim Limits
| Coverage Type | Maximum |
|---|---|
| Most Covered Claims | $300,000 per claim |
| Workers' Compensation | Statutory limits |
| Homeowners Claims | $300,000 |
| Auto Claims | $300,000 |
| Commercial Claims | $300,000 |
Net Worth Limitation
- Claimants with net worth over $25 million may have reduced coverage
- Designed to protect individual consumers primarily
- Large commercial entities may have limited protection
What Is Covered
VPCIGA covers claims under:
Covered Policies
- Homeowners insurance
- Auto insurance
- Commercial property
- Commercial liability
- Workers' compensation
- Personal liability
What's NOT Covered
| Not Covered | Reason |
|---|---|
| Surplus lines policies | Non-admitted insurers |
| Self-insured plans | Not insurance policies |
| Title insurance | Separate guaranty fund |
| Ocean marine insurance | Excluded |
| Life and health | Separate guaranty association |
| Amounts above limits | Statutory limit applies |
Funding
VPCIGA is funded by assessments on member insurers:
Assessment Process
- Member insurers pay assessments when needed
- Based on premium volume in Virginia
- May be passed to policyholders via rate increases
- Recouped over time
Assessment Categories
| Category | Purpose |
|---|---|
| Workers' Comp Account | WC claims only |
| Auto Account | Auto claims |
| Other Account | All other claims |
Producer Restrictions
Advertising Prohibition
Producers cannot:
- Use VPCIGA coverage as a selling point
- Advertise guaranty association protection
- Imply policies are "guaranteed" by VPCIGA
- Compare VPCIGA to FDIC or SIPC
- Suggest choosing insurer based on VPCIGA
Required Conduct
- Provide accurate information if asked directly
- Cannot misrepresent coverage limits
- Cannot suggest coverage exceeds actual limits
- Must not use to induce sales
Exam Tip: Remember that producers CANNOT use VPCIGA coverage as a selling point. This is a frequently tested rule in Virginia.
Claims Process
When an insurer becomes insolvent:
- Notice sent - VPCIGA notifies policyholders
- Claims submitted - To VPCIGA directly
- Claims evaluated - Within statutory limits
- Benefits paid - If claim is covered
- Policy may end - Policyholder finds new coverage
Filing Deadlines
- Claims must be filed within statutory period
- Usually at least 1 year from liquidation order
- Late claims may be barred
- VPCIGA provides notice of deadlines
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Test Your Knowledge
What is the maximum coverage VPCIGA provides for most P&C claims?
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D
Test Your Knowledge
Can a Virginia P&C producer use VPCIGA coverage as a selling point?
A
B
C
D
Test Your Knowledge
Which of the following is NOT covered by VPCIGA?
A
B
C
D
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