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Dinallo Directs Insurance Companies to Reinstate Affected Homeowners

Imagine discovering your homeowners insurance is canceled while you are in the middle of selling your house to relocate. Or, imagine a situation where your job requires frequent travel and your insurance company pulls the plug on your insurance because it says your home is “unoccupied.”

Insurance Superintendent Eric Dinallo today acted to protect consumers who find themselves in situations like these. He advised insurance companies that canceling a homeowners policy only on the basis that a dwelling is unoccupied is an illegal mid-term cancellation.

Dinallo urged consumers encountering this issue to contact the Insurance Department. He said insurance companies must reinstate the policies of affected consumers. The action could potentially affect financially-pressed consumers involved in forfeitures.

“Consumers should know that the Insurance Department will act vigorously to protect homeowners. This includes homeowners who may be involved in forfeiture proceedings, which have increased because of the troubled economy. Insurance companies need to understand that the Insurance Law protects all homeowners from improper non-occupancy cancellations," Dinallo said.

“The fact that an insured individual is not occupying a home is not a legitimate reason, in and of itself, for canceling a homeowners policy. It is improper to cancel a homeowners policy simply because a property owner may be away from home because of a situation like an illness,” he said.

After receiving numerous consumer complaints from across the state, the Insurance Department issued an advisory, known as a “circular letter,” to the insurance industry. The advisory instructs insurers to stop the improper cancellations. Circular Letter # 23 (2008) is available on the Department’s website,

The situation of a Suffolk County woman is typical of the complaints. The woman’s insurance company told her that her policy was being canceled because her home was unoccupied. But she explained that she was in the middle of trying to sell her home and relocate to the Albany area to take a new job. She said that either she or her parents were at the home every weekend and that a neighbor also looked after the property. The home was furnished and the utilities were still connected.

Other consumers registering complaints included a Syracuse couple confined to a nursing home, a flight attendant whose job required frequent travel, and a Plattsburgh man who was forced out of his home after it was extensively damaged when a neighbor’s tree fell onto it.

In each of these cases, insurers wrongly advised consumers that their policies were being canceled because their homes were unoccupied, therefore increasing the risk to their homes.

The Insurance Department’s advisory to insurers could help consumers who become temporarily displaced as the result of pending foreclosure proceedings.

Insurers may consider non-occupancy if it is among other factors that increase the risk to a property. It may not be considered as the sole factor in a mid-term cancellation.

Under the law, a homeowners policy must remain in effect, or be renewed, for three years from the date the policy first becomes effective. Cancellations or non-renewals during the three years are only permitted for certain specific reasons. These include non-payment of premium, as well as fraud or misrepresentations in obtaining policies or filing claims. Cancellations or non-renewals are also permitted when policyholders recklessly increase hazards to property or make physical changes that result in a property becoming uninsurable.

Insurers that have improperly canceled or non-renewed policies must offer to reinstate them, effective from the dates of termination. These offers must maintain the premium rates in effect at the time of the cancellations or non-renewals.

Consumers who believe their homeowners policies have been improperly canceled based on non-occupancy are urged to contact the Insurance Department. They may do so by calling toll-free 1-800-342-3736, between 9 a.m. and 5 p.m., Monday through Friday. Complaints may also be filed online at anytime by accessing the Department’s website,

Department of Financial Services


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