Homeowners Insurance: Do You Lose it if You Use It? - KMOV.com

Homeowners Insurance: Do You Lose it if You Use It?

This week, we received an email from viewer who says her insurance company will not renew her homeowners insurance policy after she filed a claim.

She says she paid her premiums faithfully for five years and filed her first claim in October after a break-in at her Dellwood home.  A month later, her company sent her notice that it would not renew her policy after it expires at the end of the year.

She showed us a letter from State Farm which states that the reason for non renewal is claim history.  The letter lists one claim vandalism claim in October.   No other reasons were given in the letter.

A spokesman for State Farm told us that the company can not comment on specific claims because of confidentiality concerns, but says that it handles each case based on individual merits and that the company is known for retention of customers.

Here's what Missouri's Department of Insurance, Financial Institutions, and Professional Registration says about when an insurance company can cancel or fail to renew a policy:

 Missouri law prohibits insurance companies from canceling, failing to renew or refusing to write a residential fire or homeowners insurance policy based on a person's place of residence or geographic location, age, race, sex, creed, color, national origin, ancestry or lawful occupation, including the military service. Companies are prohibited from refusing to write policies based on another insurer's cancellation, refusal to write or refusal to renew an existing policy.

The law provides that any policy in effect for more than sixty (60) days may not be canceled except for the following reasons:

  1. Nonpayment of a premium; or
  2. Fraud or material misrepresentation affecting the policy, in the presentation of a claim thereunder or in violation of any terms or conditions of a policy; or
  3. The name insured or any occupant of a property is convicted of a crime arising out of acts which increase the hazard; or
  4. Physical changes in the property insured that increase the hazards.

A non-renewal policy or a policy in effect less than 60 days can be canceled for any reason, as long as the insurance company states a reason for the cancellation.

A thirty-day (30) notice and the specific reason for cancellation or non-renewal of a policy must be provided, in writing, to the policyholder. A ten-day (10) notice is required if the premium has not been paid. This notice must provide information about the availability of Missouri Fair Plan Insurance coverage. Any refund due must be paid promptly by the company. If you have a complaint, please contact the Missouri Department of Insurance, Financial Institutions & Professional Registration.

The state says each company has its own underwriting guidelines and a company can chose not to renew based on claims.

Carmen Balber, with the group Consumer Watchdog.org, told me that consumer advocates have long opposed policies like this and that their group is currently trying to push legislation in California to prevent insurance companies from canceling or refusing to renew policies after homeowners file legitimate claims.

The group says that if you are facing a similar issue:  call your agent and ask the company to review their decision.  Then, file a complaint with the state. 

Here is where to find information about filing a complaint in Missouri:  insurance.mo.gov/

Missouri keeps a tally of complaints about insurance companies here:  insurance.mo.gov/cgi-bin/complaint.cgi

Illinois residents can find information here: insurance.illinois.gov/HomeInsurance/homeInsurance.asp

You can find complaint statistics about companies in Illinois here:  insurance.illinois.gov/Complaints/Complaints.asp

 

 

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