Can an insurance carrier non-renew a policy due to a catastrophic loss?
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UPDATED: Apr 3, 2013
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Insurance Question from Jackson, MS
Asked on 04/03/2013
Can an insurance carrier non-renew a policy due to a catastrophic loss? I'm asking from a commercial insurance standpoint as well. We recently had catastrophic hail damage in our area, and I've heard of one carrier wanting to non-renew a policy based on this. Can they legally do this? I thought they'd have to pull out of the state and not just off certain risks.
Answer given on April 26, 2013
Each state has its own laws and regulations regarding the non renewal of insurance policies. Most states have set up non renewal rules regarding catastrophic losses, not allowing an insurance company to select who they want to non renew due to such a loss. You may want to check withh your Dept of Insurance to see what their rules involve.Even if you had a recent catastrophic loss, your previous loss history can be included in the decision by your insurance company to non renew the policy. If you have had other, non catastrophic losses on your home or business, the insurance company may have simply provided that this last loss was just a part of a history they are seeing in your case. You should talk to your insurance agent or insurance company to try to understand their decision to non renew your policy.
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