The Home Guru: Dumped by My Home Insurer. It Could Happen to You Too!

Nobody likes to be dumped, right?  Whether we are let go from a romantic relationship, a job or political office, it can be painful.

     But I can assure you, few experiences compare with receiving a non-renewal notice for a home insurance policy and having difficulty in finding another company to insure you.  It happened to me, through no fault of my own, and it could happen to you too.

     Yes, after many years of being a loyal customer and paying my premiums on time, my home insurer sent me a non-renewal notice after I had filed two claims, both catastrophic experiences, one from super storm Irene, and the other from Sandy, each of which damaged my property, felling many trees, destroying fencing in one, and all of my pool equipment in the other. 

     The real rub came when my agent was not able to get any of the other companies her agency represents to insure me, not even at a much higher rate.  There was one company that considered taking me on as a “high risk” client, but only at an outrageously overpriced premium which would have increased my annual payment from $2,900 to $7,000. In desperation, I was ready to accept this brand of extortion, but then the insurer Googled my house and found that it was on the market for sale.  Sorry, I was told, insurers won’t issue a policy for a home that is listed for sale. It seems that there is the fear among insurers that the home may be left vacant.

     What is a homeowner to do in such a complicated set of circumstances?

     First I tried to wrestle with my rage by seeking justice.  I prepared to complain to the New York Department of Financial Services, the agency that supervises and regulates all insurance business in the state.  I also planned to complain to my state and county legislators. How could this great injustice go unchecked?  How could this insurance company who denies insurance after a major catastrophic event not be censured?

     When I calmed down a bit and did my research on line, I found that, indeed, an insurance company can refuse to renew a policy at any time following a certain guarantee period, usually three years.

     In seeking another insurer, I immediately removed my house from the market, and sought help from other insurance agencies. When I called a new recommended agent, he responded to my tale of woe about insurers by saying, “Those bastards!” and guaranteed that he’d help me out.  After almost a week, he called me back to say that he couldn’t help me after all. None of his companies would issue a policy because I was listed as “high risk.”  Listed where?

     I went back to the office manager of my original agency, Lynn Hillman of Eifert, French & Ketchum, who had always been very helpful to me in the past.  I felt inclined to blame the agency and asked why I wasn’t told that filing a second claim might jeopardize my policy. I would have eaten the expense of the second claim, no matter how great, had I known.

     “This is the first time I recall this insurance company refusing to renew after a catastrophic event,” she responded, promising to do what she could, leaving no stone unturned.  In a subsequent meeting, Lynn told me that insurance companies can refuse to renew a policy for any number of reasons, but basically it boils down to filing too many claims in a certain period of time, plain and simple, and the guidelines for individual insures keep changing.

    “First it’s one company that has the best products and rates, then it’s another,” Lynn said. “It’s important to keep up with these changes and to move your client’s policies around accordingly.”

      The really challenging part to the home owner who is not renewed, according to Hillman, is that this information is placed on a reference list called CLUE – Comprehensive Loss Underwriting Experience – which all insurers consult before issuing a policy.  Great, I thought, it’s like being blacklisted in the days of McCarthyism!

    After my first lesson learned -- to consider whether it pays to file a second claim in a short period of time -- I learned another important lesson from Lynn.

     When she called me within a week, I was jubilant to hear that she had found a carrier that would insure my home at a reasonable price. What she did was to ask the company that already had my auto insurance to take on my home as well. “It’s called being a multiple-line client, or bundling of policies, which has its advantages,” she told me.  “First, an insurer is more favorably disposed to those clients with whom they have more than one policy and, second, credits can accrue on both policies which provide reasonable premiums for both.”

     Phew!  Now fully insured, I’m a little wiser thanks to a savvy and creative agent who served as a real advocate for me.  If anyone else out there is having insurance challenges, I can wholeheartedly suggest that they call Lynn Hillman of Eifert, French, & Ketchum at 914-250-2500.

Bill Primavera is a residential and commercial Realtor® associated with Coldwell Banker, as well as a publicist and journalist writing regularly as The Home Guru. For questions about home maintenance or to buy or sell a home, he can be emailed at Bill@PrimaveraRealEstate.com or called directly at 914-522-2076.