Q: I received notice that my home insurance company will not renew our coverage when it is due in May, because of “loss severity” in February of 2007. A pipe burst in our bathroom, flooded a number of rooms and a crawl space. After a year we settled with the insurance company for about $40,000.
Suffice it to say that the action taken by the insurance company demonstrates its primary interest is to maximize profits and minimize risks.
We have carried insurance for 40 years, and this is our first claim.
I have complained to the state Department of Banking and Insurance. Our insurance agent is trying to find us replacement coverage, but the indications are the premiums will likely double. Can you help?
- J.M., West Cape May
A: State law requires insurance companies to inform you about cancellations via letter 30 to 120 days before your policy is due to expire and to give you a specific reason for nonrenewal. Since the company gave you 60-days’ notice and a specific reason, it meets that requirement of the law.
It is illegal in New Jersey to fail to renew an owner-occupied unit because of losses due to weather damage or because of a third-party criminal act committed by a non-household member. Other than that, companies can cancel coverage in the wake of large losses.
For more information visit:
www.state.nj.us/dobi/division_consumers/insurance/homeowner.htm
Found here.
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