When saving money in a bank, one does not have to worry about credit risks of the bank because there is deposit insurance. When buying insurance, do I have to worry about the credit risk of the insurance company?
Do I have to pore over an insurance company's financial statements to determine whether or not it is safe for me to buy an insurance policy? How can I be assured that the insurance company will be able to honor its agreements if I do not inspect its financial statements? My fear is that when the insurance company goes bust, I lose the premium I paid along with the insurance coverage.