|by Sean O'Neill||26|
The short answer is, Yes. AIG Travel Guard is the largest provider of travel insurance policies in America. Budget Travel has praised the company in the past for its relatively cheap policies, responsive customer service, and flexible policy options.
But AIG Travel Guard is part of AIG, or American International Group, an insurance company in the news today because of financial troubles.
REVISED AND UPDATED AT 7p.m.,ET, on 9/16: The U.S. Treasury says it will rescue AIG with an $85 billion bridge loan.
So what about your AIG Travel Guard insurance policy? Is it safe?
I asked Dan McGinnity, a spokesperson, to comment. Here's what he had to say:
The insurance policies written by AIG Travel Guard and other AIG companies are direct obligations of our regulated insurance companies around the world. These companies are well capitalized and meet or exceed local regulatory capital requirements. These companies continue to operate in the normal course to meet our obligations to our policyholders. The New York State Department of Insurance, which regulates AIG, said in August the company “continues to meet New York’s solvency standards and is able to honor its obligations to policyholders.” And as reported in an article in today’s Wall Street Journal, Standard & Poor’s said that AIG had enough money to pay claims and post collateral, if needed.
All true. So, there doesn't seem to be any reason to worry right now, and it continues to seem to be a good idea to consider AIG Travel Guard for travel insurance. We have routinely recommended the company's policies, and we've found that it's typically cheaper to buy insurance directly from an insurer, such as AIG Travel Guard, than through a middleman, such as a major online travel agency or a major car rental company, who will tack on their own fees.
UPDATE part two: 9/16:
The CEO of AIG Travel Guard, John Noel, has issued a statement. Here's an excerpt:
"AIG is different than other financial institutions that have been severely impacted by recent developments in the financial service markets. We have strong, well-positioned businesses in diverse markets around the world. We have a deep asset base, with stakeholders’ equity of $79.9 billion and assets of over $1 trillion.
And as you know, Travel Guard has been a strong, dependable partner that has always been there for our travel partners and their clients.
It may be of some comfort to know that independent sources outside of AIG also have confirmed our financial stability. Earlier today [on Sept. 15], New York's Gov. David Patterson announced that he had cleared AIG to borrow up to $20 billion from its operating subsidiaries to cover day-to-day needs. In making the announcement he stated what many of us already know -- AIG still remains financially sound.
Let me assure you, AIG continues to rank among the largest and strongest insurance companies in the world. Not only do we have ample resources to pay our claims, but we continue to do so with a level of responsive service that is unmatched by any of our competitors.
The key point is that state regulators monitor insurance companies, requiring them to keep enough cash on hand to pay out policies in a reasonable manner. While a large part of AIG is struggling, the part that sells travel insurance, AIG Travel Guard, is sound.
*This blog post has been revised since it was first published.