The Office of General Counsel issued the following informal opinion on August 7, 2002, representing the position of the New York State Insurance Department.
Re: N.Y. Ins. Law § 3425(d)(1)- Valid Nonrenewal
May an insurer nonrenew a personal lines policy based upon the failure of the insured to complete a self-inspection survey of the insureds residence as required by the insurer?
Yes. An insurer may nonrenew a personal lines policy based upon the failure of the insured to complete a self-inspection survey of the insureds residence as required by the insurer.
An insured received a letter from his insurer requesting that the insured complete a self-inspection survey of his residence. The insurer provided the insured with instructions, a questionnaire and a camera for the inspection. Upon the insureds failure to complete the self-inspection, the insured sent a reminder to the insured requesting the camera and completed questionnaire. The insured did not complete the self-inspection, and subsequently received a notice of nonrenewal from the insurer which listed "failure to complete self-inspection" as the reason for the non-renewal.
N.Y. Ins. Law § 3425(d)(1) (McKinney Supp. 2002) states that, "the specific reason or reasons for nonrenewal or conditional renewal shall be stated in or accompany the notice [of nonrenewal]."
An insurer may nonrenew a personal lines policy subject to section 3425 for any reason not otherwise prohibited by law (such as race, religion, etc.), in accordance with the insurers uniformly applied underwriting rules, and if it is at least 45 days before but not more than 60 days in advance of the expiration of the three-year required policy period. In the present case, the insurer supplied a specific reason for the nonrenewal, that being "failure to complete self-inspection." The Department does not believe that requesting insureds to do the actual inspecting of an insureds residence is unreasonable.
For further information, you may contact Senior Attorney Meredith S. Kaufer at the New York City Office.