Insurance Companies Urged To Extend Coverage

As the federal government shutdown continues, Kentucky Governor Andy Beshear is urging insurance companies to implement safeguards to ensure federal workers do not lose critical insurance coverage during the federal government shutdown.

Team Kentucky is asking all insurers to immediately implement the following protective measures for their policyholders who are federal employees:

Deferment on cancellations: Insurers should seek to postpone or withdraw termination notices occurring on or after Oct. 1, 2025, on any in-force policy due to nonpayment of premium for federal employees.

Insurers are asked to continue coverage in cases of unpaid premium for at least 30 days or 30 days after the end of the federal shutdown, whichever is longer. If, following the end of the federal shutdown, an affected consumer indicates to an insurer that they have not yet received their guaranteed compensation for the period of the federal shutdown, the department requests that insurers continue coverage, even in cases of unpaid premiums, for at least an additional 30 days.

Time-period extension for payments: Insurers are permitted to extend payment time periods for affected consumers to pay premiums, co-payments, deductibles and other charges that, when extended, will be for the benefit of their customers. Such extensions should be for reasonable time periods that will not result in a financial hardship on consumers when the payments become due after the federal shutdown. Insurers may provide for recoupment of unpaid premiums from claims occurring during the forbearance period.

Time-period extension for repairs: If an affected consumer indicates to an insurer that repairs cannot be completed within the time required under any policy, the department requests that insurers provide consumers with an extension of at least 30 days to make such repairs, or such time as is necessary.
Kentuckians who lost compensation due to the shutdown and are threatened with policy cancellations can contact the Department of Insurance for more information.

The National Flood Insurance Program has also stopped writing new policies due to the shutdown. According to Team Kentucky, this could have a dramatic effect on prospective homeowners whose mortgage company requires flood insurance to complete the purchase of their new home.

To assist buyers, the Department of Insurance has compiled a list of surplus lines insurance companies that offer flood insurance coverage and brokers who sell it. Anyone in need of flood insurance can contact the Department of Insurance’s Consumer Protection Division for additional guidance.

For more information, contact DOI’s Consumer Protection Division at 800-595-6053, by email at doi.consumercomplaints@ky.gov or visit insurance.ky.gov.
Source: WBKO