Hawaii Insurance License Practice Exam

The Guaranty Association provides essential protection for policyholders in the event that an insurance company becomes insolvent. In Hawaii, the maximum liability for claims not related to Workers' Compensation or unearned premiums is set at $300,000 per claimant. This means that if a member insurance company fails, the Guaranty Association will cover up to $300,000 in claims for each individual policyholder, ensuring they receive some level of compensation despite the company's insolvency.

This limit helps maintain a balance between protecting consumers while also managing the financial stability of the Guaranty Association itself. The thresholds established for different types of claims, such as Workers' Compensation or unearned premiums, are designed with the idea of supporting the most critical areas of coverage and ensuring that the association can sustain its obligations over time.