In the spring of 2006, residents of the 34th District began contacting Senator Jeff Klein to report that longtime homeowner’s insurance policies with Allstate were not being renewed; the company was taking steps to reduce its exposure in the coastal NY insurance market. In 2006, Allstate cancelled, or “non-renewed” more than 26,000 homeowners policies throughout the coastal portions of NYC, Westchester County and Long Island. Similar cancellations followed in 2007 and 2008.
Hoping to enlist the support of the State Insurance Department, Senator Klein reached out to Superintendent Eric Dinallo and shared the stories of victimized residents in the 34th Senate District. The conversations that followed sparked a department investigation that forced Allstate to rescind letters of non-renewal and offer to reinstate homeowners’ insurance policies that had not expired as of August 28, 2007 in any case where the reason for dropping the policy was a homeowner’s lack of auto or life insurance with the same company.
Klein was successful in uncovering the illegal business practices of Allstate, under current law, companies like Allstate, State Farm and Liberty Mutual can still cancel up to 4% of its statewide policies each year without any official scrutiny. This can amount to thousands of policies for a large insurer, which can cause a major disruption in the local insurance market if targeted to a small geographic area. This is exactly what many residents are seeing today in zip codes such as 10465 and 10464 where people are receiving non-renewal letters in the Edgewater, City Island and Country Club communities.
“Unfortunately, customers in the coastal areas of our communities are being priced out of homeowner’s insurance by companies looking to fill their bank accounts. We need to force insurance providers to be responsible to the neighborhoods and communities they serve,” Klein stated.
Klein and the State Insurance Department continue to track homeowner’s policy non-renewals in the 34th District to make sure that other insurers are not using unfair or illegal criteria to target policies. Every non-renewal submitted to Senator Klein’s office is given to the Department for a complete investigation.
Klein’s Insurance Information Forum will be held on Monday, September 15 at Villa Maria Academy from 7 p.m. to 8:30 p.m. Call (800) 718-2039 for more details.