Will Your Policy Be Canceled If You File A Claim?
Insurance companies don’t like it when you file a claim. Some may even take the extreme measure of canceling your policy all together once it lapses. Since insurance isn’t regulated at the federal level, whether this is allowed or not can vary from state to state.
In Delaware, the Superior Court ruled for the insurance industry against the state’s insurance regulator concerning this type of scenario.
“A Delaware Superior Court has ruled that the state’s insurance regulator overstepped his authority when he prohibited property insurers from refusing to renew a homeowner policy based solely on whether the insured had filed a recent claim or made an inquiry.”
The regulator in this case issued a regulation calling this type of act an unfair trade practice when that state’s legislature was unable to pass a law that would have made it illegal. It remains to be seen if they will rectify that or not.
This is nothing new however. The industry has always been looking for ways to minimize its risk exposure, much the dismay of their customers. Companies have even left entire regions that they deemed too costly to do business. For this reason there has been much more scrutiny lately over their recent profit levels.
Nonetheless it can be quite disconcerting to have your insurance carrier drop you for actually needing the policy you paid for. Be sure to inquire with your state’s insurance commission to determine what course of action might be open to you.
