Insurance company leaving New York due to financial reasons

Adirondack Insurance Exchange sent a letter to customers last month that said the company's "financial position continues to deteriorate," and that customers will need to find a new company for coverage.

Daniel Perrone

The letter above was sent to Sarah Andrews, a North Collins woman who took out a policy through Adirondack. However, she is now suing the company. The lawsuit served this week alleges that Adirondack denied her $300,000 claim after she was involved in a serious car crash last year in Erie County.

"Without any explanation, we received a denial and letters that basically said we will not pay this insurance claim we will not provide the full amount of insurance benefits because they do not feel that it's the appropriate level of compensation," said Andrew's attorney Daniel Perrone.

Perrone said Andrews broke her arm in three places and has permanent damage. Perrone said Andrews was never told about the company's financial issues when she became a customer. She is now seeking more than $300,000 from the company, which now has until mid-September to respond to the lawsuit.

"Unfortunately they ran into some financial issues, causing them to pull out of insurance in New York State," said David Kirst, AAA of Western and Central NY's Insurance Sales and Operations Manager.

"This is more of an immediate thing," said Kirst. "It's actually very rare."

If you're a customer of Adirondack Insurance Exchange or are looking for a new insurance provider, Kirst offered there's tips:

1. Open all mail and emails from insurance companies so you know of any changes
2. Shop sooner rather than later as rates can rise over time
3. Get help from an agency to find you the right plan. AAA can help over the phone or at one of their branch offices
4. The cheapest policy might not always be the most reliable.
5. Kirst said Adirondack likely underpriced policies, which led to issues. He said this is why it's worth it to pay a little more for a reliable insurance policy.

"No one wants to pay more, but if it is the right carrier for the right coverage it is worth it," said Kirst.

On its website the Adirondack Insurance Exchange states : "If your policy is canceled prior to the expiration date, you will be issued a pro-rated refund for any paid premium covering the period after cancellation. We will be providing monthly communications to support the transition."

7 News reporter Michael Schwartz went to Adirondack Insurance Exchange's local office in Williamsville where there were no cars in the parking lot. Schwartz called the company and got a hold of a phone service employee who said there was no way for Schwartz to get in touch with someone at the company.