In a press release issued August 28, 2007, New York Insurance Superintendent Eric R. Dinallo announced that insurers 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.  If any insurer has issued a notice of non-renewal on that basis, it must immediately rescind that notice if it has not yet taken effect.

This comes after complaints from homeowners in coastal areas that their homeowners policies were not being renewed, allegedly because of a desire by insurers to reduce exposure in coastal areas, and in certain instances because the homeowner did not have an automobile or life insurance policy with the insurer or an affiliate as of a specific date.  “Insurance Law prohibits tying to safeguard consumer choice,” Mr. Dinallo said.  He also stated that “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.”

Following a full regulatory and legal review, the Department took specific action and directed two insurers to immediately cease this practice.  Also as a result of the review, Mr. Dinallo reported that requests have been made to other insurers to inform the Department if they are engaging in this practice and to stop without delay if they are.