Under the present law in New York State, an insurance company may generally cancel your homeowners or tenants policy by issuing a cancellation notice during the first 60 days it is in effect as long as the cancellation notice states the specific reason or reasons for the cancellation. Show After your policy has been in effect for 60 days it may not be cancelled or non-renewed for a three-year period, except generally for the following reasons:
At the end of this three-year period, your company may refuse to renew your policy. By law, any notice of nonrenewal must be provided at least 45 days, but not more than 60 days, prior to the expiration date of the policy. Non-RenewalA homeowners insurance policy is purchased to cover sudden and unexpected large losses. Homeowners should be careful about filing multiple small claims over a short period of time, as some carriers have restrictions on the number of claims you can file before you are designated a higher risk customer, which may result in your homeowners policy being non-renewed. The decision to file a claim for damage or a loss that is covered under your policy is up to you, but when it comes to minor damage you may want to consider paying for repairs out-of-pocket. Tips for Avoiding Non-renewalConsider carrying a higher deductible. This will save you money on your premium and discourage you from filing multiple small claims. Perform regular home maintenance. Preventing damage from typical in-home mishaps that can be easily avoided may save you from future risk. Learn your home's claims history. If you are buying an existing home, find out what claims have been filed in recent years. Water loss claims, for example, can impact whether the property is considered higher risk. Before purchasing a property, you can request that the current owner of the property order a Comprehensive Loss Underwriting Exchange or CLUE report. A CLUE report is generated by a claims history database managed by LexisNexis® and enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy. If Your Homeowners Policy is Non-RenewedThere is a difference between cancellation and non-renewal. An insurer cannot cancel a policy that has been in force for more than 60 days except:
Non-renewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. In New York, an insurance company must give you 45 – 60 days notice and explain the reason for non-renewal before it drops your policy. If you want a further explanation, call the insurance company. If you think the reason for non-renewal is unfair, you can file a complaint with the Department of Financial Services. If your insurance company did not renew your policy, you will not necessarily be charged a higher premium at another insurance company. Skip to Content
NOTE: Effective for policies delivered, issued for delivery, or renewed on or after January 1, 2018.
Individual Policy Provisions (Effective 9.1.2019)Monoline Commercial Property and Texas Standard Fire (excluding dwelling and government units) Cancellation Restriction:
Cancellation Notice: 30 days' notice to insured and mortgagee, except for nonpayment of premium then 14 days' notice to the insured and mortgagee. Exception: If the insured is a condominium association, 30 days' notice is required for nonpayment of premium. Nonrenewal Restriction:
Return Premium: Based on company filing, short rate or pro rata. Other Provisions:
Property and Casualty Policies Insuring Government Units Cancellation Restriction:
Cancellation Notice:
Nonrenewal Notice: Return Premium:
Other Provisions:
Homeowners Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restrictions:
Nonrenewal Notice:
Return Premium:
Other Provisions:
Dwelling/Farm and Ranch/Farm and Ranchowners Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restrictions:
Nonrenewal Notice:
Return Premium:
Other Provisions:
Commercial Auto (BAP, Garage) (Except when the policy insures a government unit) Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restriction:
Nonrenewal: Return Premium:
Other Provisions:
Commercial Liability (CGL, Professional, Umbrella) (Except when the policy insures a government unit) Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restriction:
Nonrenewal:
Return Premium:
Other Provisions:
Commercial Package and Business Owners (Except when the policy ensures a government unit) Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restriction:
Nonrenewal: Return Premium:
Other Provisions:
Personal Auto Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restriction:
Nonrenewal: Return Premium:
Other Provisions:
Workers' Compensation Cancellation Restriction:
Cancellation Notice:
Nonrenewal Restriction:
Nonrenewal:
Return Premium: Other Provisions:
Premium Refunds
Reductions in Coverage Same as Cancellation or NonrenewalThe following actions by an insurer, without the consent of the insured, are considered the same as cancellation or nonrenewal, and therefore prohibited except as permitted by the cancellation or nonrenewal provision of the policy – see Commissioner's Bulletin #B-0020-06:
Premium Note Cancellations
An Agent's Right to NonrenewOwnership and control of expirations are the cornerstones of the independent agency system. This idea traditionally has included not only an agency's rights to select the customers it prefers and to place those customers with the insurance company it determines is most appropriate, but also the right to terminate the agency's relationship with a customer at any time. This latter right is being tested today as never before, as consumer groups advocate the position that agents and companies should "take all comers" and keep clients on the books until some serious underwriting flaw becomes evident. IIAT's Position The Independent Insurance Agents of Texas advocates the position that an independent agency controls its own business relationships and, therefore, has the right to terminate any client relationship, as long as the agency complies with prohibitions against illegal discrimination (based on race, religion, color or national origin) and with rules, laws and policy provisions regarding proper notice of cancellation and nonrenewal. According to a legal opinion from IIAA's general counsel, an agency's customer does not have a contractual right to the agency's services. An agency, therefore, does not need the company's permission to terminate the agency's relationship with the customer. IIAT believes that an agency has the right to request nonrenewal of a policy for its own reasons, which may have nothing to do with company underwriting guidelines. For example:
A Company's Right to Nonrenew Many phone calls from members to the IIAT office on this issue indicate that some companies are reluctant to issue nonrenewal notices at the agency's request because they don't want to run afoul of Texas' nonrenewal requirements and prohibitions. It may be helpful, therefore, to review the rules and laws that affect a company's right to nonrenew a policy. Each policy is different, but generally, the company has a right to nonrenew a policy within a specified period for any reason unless the right to use a particular reason is restricted by law, rule or policy provision. Agents' and Companies' Responsibilities Subject to these exceptions, and to prohibitions concerning illegal discrimination, a company may nonrenew for any other reason. Therefore, a company should accept an agency's nonrenewal request once the company is satisfied that the agency is not making the request based on a reason that is restricted by law or rule. The company must be willing to provide a written statement concerning the reason for nonrenewal. The statement must fully explain the agent's decision to nonrenew, giving the precise incident, circumstance or risk factor(s) involved in the decision. In addition, the insurer must state that the agent is the source of information relied on regarding the incident. Notifying the Client Despite the fact that an agency has a right to request termination of its relationship with the customer, an agency does not have independent authority to send a policyholder a nonrenewal notice. The insurance contract gives the insurer this authority. The policy is a two-party contract between the insurance company and the named insured, and the agency is not a party. The policy authorizes only the insurance company to send a nonrenewal notice, subject to certain stated exceptions. In any business transaction, however, an entity may authorize an agent to act on its behalf, whether that be an employee of the entity or an outside party. With specific authority granted by the company, as either an addendum to the agency agreement or a letter from the company for a particular policy, the agency can have the express authority to nonrenew a policy. It must use the company nonrenewal form in such cases, not the agency's letterhead. However, in light of the restrictions various laws, rules and policy provisions place on the nonrenewal right, a company may be reluctant to give an agency unlimited authority to issue nonrenewal notices. If a Company Refuses to Nonrenew What can an agency do if the company refuses to send nonrenewal notices at the agency's request or to grant specific authority for the agency to send notices? Nothing. Try having another talk with the insureds to convince them that it would be in their best interest to find another insurance agency to service their business. If they agree, get it in writing. Reference Sources
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