State Guaranty Fund

DEFINITION of 'State Guaranty Fund'

A fund administered by a U.S. state to protect policy holders in the event that an insurance company defaults on benefit payments or becomes insolvent. The fund only protects beneficiaries of insurance companies that are licensed to sell insurance products in that state.

BREAKING DOWN 'State Guaranty Fund'

These state funds act as a form of insurance for insurance, and are funded by insurance companies that sell insurance in a given state.

The amount of funding an insurance company is required to pay is a percentage, ranging from 1- 2% of the net amount of insurance it sells within any particular state.

RELATED TERMS
  1. Bureau Rate

    A standard price per unit of insurance set by a state's insurance ...
  2. Central Loss Fund

    A fund set aside by some states in order to cover policyholder ...
  3. Insurance Industry ETF

    A sector-following fund that invests primarily in insurance companies, ...
  4. Insurance Guaranty Association

    An organization that protects policyholders and claimants in ...
  5. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  6. Admitted Company

    An insurance company that is domiciled in one state but is admitted ...
Related Articles
  1. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  2. Home & Auto

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  3. Home & Auto

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  4. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  5. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  6. Insurance

    How to Protect Your Income No Matter What

    What does it mean to insure your income? Here are a variety of ways to do it and some insights into when it might make sense to invest in income insurance.
  7. Insurance

    Top 5 Car Insurance Companies in Texas (PGR, ALL)

    Examine the five biggest automobile insurance companies operating in the state of Texas, ranked based on market share in the state.
  8. Insurance

    The Dangers Of Stranger-Owned Life Insurance

    Find out how these policies can be used to abuse the system that many people rely on for protection.
  9. Entrepreneurship

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
  10. Personal Finance

    State Guarantee Associations: The Payer of Last Resort

    What's covered and what happens if your insurance company is in financial trouble and can't pay your claim?
RELATED FAQS
  1. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  2. What are examples of the largest companies in the insurance sector?

    Read about some of the largest and most influential companies in the insurance sector, a list that includes Berkshire Hathaway ... Read Answer >>
  3. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
  4. What is the usual profit margin for a company in the insurance sector?

    Learn what the average profit margin is within the insurance industry, and what factors can affect the profitability of an ... Read Answer >>
  5. How do I choose which insurance company to use?

    Picking an insurance company to use is not an easy task, considering the financial crisis of 2008 and 2009. Several financial ... Read Answer >>
  6. Should I be worried about my insurance company?

    Yes, policyholders should also take a serious look at the financial stability of their current insurance company especially ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center