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Tying homeowners insurance renewals to also having auto or life policies is illegal

Insurance companies may not refuse to renew homeowners insurance policies based on whether a policyholder has other business with them, such as an automobile or life insurance policy, Insurance Superintendent Eric R. Dinallo announced today. Any company that has issued a notice of non-renewal on that basis must immediately rescind that notice if it has not yet taken effect.

The Insurance Department acted after receiving complaints from some homeowners in coastal areas that their homeowners insurance policies were not being renewed, in part, their insurance company said, because it wanted to reduce its exposure in coastal areas, and partly because the homeowner did not have an automobile or life insurance policy with the company or an affiliate as of a specific date.

“We have moved to protect consumers today by immediately stopping the impermissible tying of renewals of coastal homeowners insurance policies to whether the homeowner has auto or other policies with the same company. Insurance Law prohibits tying to safeguard consumer choice,” Dinallo said.

“The insurance companies’ actions contradict what they are telling policyholders and regulators. They say they are trying to reduce their exposure to the risk of losses from hurricanes. But pressuring people to buy homeowners and auto or life insurance actually increases the insurers’ risk,” Dinallo said. “This is obvious when one company’s plans allow it to renew a wood frame house – which is more susceptible to hurricanes – if the owner also has an auto or life policy, but not renew a brick house right next door because the owner has no other insurance with the company.”

The Department has already taken specific action. “We have directed two companies that we know were engaged in this practice to immediately cease. We have asked other companies to inform us if they are engaging in this practice and to stop without delay if they are,” Dinallo said.

About 18 months ago under a prior Insurance Superintendent, the two insurance companies first informed the Department of their plans to consider whether homeowners also had auto and/or life insurance policies when deciding which consumers not to renew. The prior Administration had not made a formal determination on the plans.

After receiving a number of complaints from consumers who had been sent these non-renewal letters, Superintendent Dinallo ordered a full regulatory and legal review, which resulted in today’s decision.

After an investigation, the Department determined non-renewing homeowners’ coverage based on not having another policy with the company constituted an unlawful inducement in violation of Insurance Law, and any notice using that reason would be invalid.

Insurance companies are aware of the law. Two tried to avoid violating it by setting a date in the past and making the renewal decision based on whether a homeowner had more than one insurance policy as of that date. They claimed that this meant that they were not trying to influence any future decision by consumers.

The Department disagreed, finding that such a notice clearly states that the non-renewal is a direct result of the policyholder’s failure to purchase and maintain other coverage from the particular company. Consumers who had been renewed would reasonably infer that their insurance company might elect not to renew them on the next annual renewal date if they did not maintain their other policies with that company.

Consumers who have received non-renewal notices on the basis that they did not have other insurance with the same company should immediately contact their agent or company. Consumers can also call the Insurance Department’s Consumer Services hotline at 1-800-342-3736 during business hours for help, or visit the Department’s website at

“Insurance companies have the right to reduce their exposure to risks, such as hurricanes. But there are rules they must follow when they choose not to renew some of their policies. For example, they can only not renew a maximum of four percent of their homeowners policies statewide in any one year. The Insurance Department will ensure that companies follow those rules,” Dinallo said.

Department of Financial Services


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