Like everyone, I’ve been watching the bloodbath on Wall Street unfold, but I had figured that so far, I’m relatively unaffected by it all, since I haven’t involved myself in any of the investments (and losses) that such outfits as Bear Stearns, Countrywide, or AIG made.  I have been pretty prudent with my money, and I thought I would stay clear of the damage.  Now I’m not so sure.

On Saturday, I got a new policy declaration from my auto insurer, 21st Century.  I’ve been pretty happy with thim, and it was nice to be going with a California company.  But now, even though the declaration does list 21st Century at the bottom, up on the top, prominently displayed is the “AIG” logo.

I admit I knew this was coming, and up until recently, I wasn’t particularly concerned since AIG is (was) a really big, solid insurance company with a good conservative reputation (and I like that in an insurance company).  But in light of the news about the company, this change is no longer comforting.

Things have been further complicated by Governor Paterson’s statement today that AIG would be able to “tap its subsidiaries” for up to $20 billion in “liquidity” to help it through a rough patch.  Just which “subsidiaries” does the Governor mean?

If it’s 21st Century, I am not pleased.  It doesn’t happen that often, but insurance companies do default on their obligations from time to time.  It happened to me about 20 years ago with another car insurance company, and I ended up in the “assigned risk” pool while I undertook the always pleasant task of shopping for car insurance.  That’s how and when I ended up with 21st Century (back when it was only 20th Century).

I don’t want to go auto insurance shopping, and I don’t want to have to do it more than once either.  I am left with the uneasy feeling that if AIG sucks the reserves out of Century 21, I’ll be in the assigned risk pool again.

Also, if I do find another company, I am really not all that assured that it won’t be at risk as well.  This whole financial mess is much more complex than just the parts we know about, and probably all the insurers are hooked into crazy investments like Credit Default Swaps and Collateralized Dept Obligations.  SO, while I shop, I have to wonder if I’m simply trading one problem for another.

I called the Department of Insurance today to find out it anyone there knew what was going on and what might happen if AIG does drag 21st Century down.  I should have spent my time on something else, because they either don’t know anything or aren’t going to tell anyone anything until there really is a problem.

Tomorrow, I think I will be calling 21st Century just to see if they can give me any assurances.  If they can’t, I guess I will be spending my free time in the next couple of weeks evaluating auto policies and insurance company balance sheets.  WooHoo!