What are the payment limits for claims under the Guaranty Association?

The correct choice regarding the payment limits for claims under the Guaranty Association accurately reflects the guidelines set by state laws that govern such associations. Guaranty Associations exist to protect policyholders in the event that an insurance company becomes insolvent. These associations are designed to ensure that claims can still be paid even when an insurer cannot fulfill its obligations due to financial failure.

In Washington, the Guaranty Association covers claims that typically have a cap, which is structured to limit the amount payable per individual claim. The correct choice indicates that payments exceed $100,000 but are capped at $300,000, striking a balance between providing substantial support for policyholders while managing the association's resources effectively.

This framework helps maintain consumer confidence in the insurance market, ensuring that individuals have recourse to recover damages up to a set limit if their insurer fails, thereby enhancing the stability of the insurance industry overall.