Anybody know about appealing to insurance commissions?

The hits just keep on coming…

To review, we had a house fire in December. Last week, our insurance company sent us a Dear John letter saying that they were dropping our coverage.

Here’s where it gets fun:

Because we have an open claim, no other insurance company will pick us up.

Because of our new “high risk” status, the only companies that will pick us up AFTER the claim is closed are the “high-risk/surplus” companies, who will double or triple our premium.

In the current economy, the old “three strikes you’re out” insurance rule is now “one strike you’re out.”

We’ve had three total claims on our homeowners insurance since 2005, two small ones (a few hundred each time, one for a small liability and one for storm damage) and this enormous one. Yes, our insurance company “lost the bet” that we wouldn’t have a house fire. However, we’ve always taken every step we could to reduce risk; the liability issue was resolved and will never recur and the storm damage one was used to pay for repairs that will mean that similar damage doesn’t occur again. The house fire was the result of an ice storm and loss of power. Obviously, in hindsight, we should have bitten the bullet several years ago and not submitted the claims, but honestly (from what our insurance guy has told us) they probably would have dropped us after the fire even if it had only been that one claim.

So now we are trying to appeal to the state’s insurance commission to squeeze one more year out of our current provider, to enable us to get the claim closed and set aside some money to pay for higher premiums. 

If anyone has any magical insights on the whole process or ideas on how to frame such an appeal, you would seriously make my weekend (and lower Doug’s blood pressure by twenty or thirty points).

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4 thoughts on “Anybody know about appealing to insurance commissions?

  1. My recommendation is to get in touch with your state senator and representative. A telephone call is generally more effective than email. Ask them to help you get in contact with someone at the State Insurance Commission who can explain (and guide you through) the appeals process. It might be a good idea to contact the State Directors of your US Senators and your US Representative (they all have local offices for constituent service). However, I would not speak with them until you have spoken with the state folks.
    Hope this helps.

  2. Well, I’m a licensed insurance agent in my state, so have some insight into the industry.

    In New Hampshire, the company can choose to non-renew your policy and needs to provide this 45 days before the renewal if it is for any reason except non payment of premium.

    # of claims filed doesn’t usually mean anything (I hear this everyday from people afraid of claims). The insurance is there to indemnify you in case of a loss. It is NOT bad to use it. As in the case of the storm damage claim the coverage is designed to replace/pay for repairs.

    What most insurance company underwriting guidelines look at is loss ratio…ie how much premium is paid vs. how much is paid out in claims. If you have a 300% loss ratio (example, not set in stone) and are at fault, expect to be non renewed. Cancellation is different than non-renewal and mostly would involve things like material misrepresentation (but that isn’t the case here). The insurance guy was correct when he said you probably would have been dropped because of the fire.

    You can file a complaint with the insurance commissioner here: http://www.nh.gov/insurance/consumers/complaints.htm

    Every state has different laws and commissioners have different duties, however looking at the site I see right off that yours is designed to help with:
    * Satisfactory reconciliation
    * Factual resolution
    * If possible and available: compromise disputes

    What We Cannot Do: (cut and paste)
    We cannot order refunds, cancellation of contracts, damage awards, or other legal remedies because we do not have that authority under New Hampshire law. If you are seeking this type of relief, you may wish to consult with an attorney.

    They probably can’t force your insurance company to keep covering you if the company isn’t doing anything illegal. You *may* be able to have the insurance company review the decision to non-renew, but insurance companies do have guidelines to risks they can underwrite…they have to treat you like everyone else when offering coverage…ie… Redlining is illegal. Companies can’t deny coverage based on things like protected classes…etc….

    The insurance commission may also be able to help mediate and settle the claim faster so that you can get replacement coverage easier.

    You may be best to consult a lawyer if you feel the company is doing you bad. Threatening the company doesn’t work. Most insurance companies try to be very aware of the laws as minor fines are tens of thousands of dollars a day. When someone is upset and says they will call the commissioner I usually tell them that is their right.

    I would try first asking for Underwriting to review the non-renewal. Have your arguments ready and be rational. I have no clue who your company is so can’t say anything about policies or how strict their underwriting guidelines are (I work for a small commercial “safe” portion of a large carrier).

    Good luck.

  3. I’m also an insurance agent, and the advice above is exactly what I would tell you, also. Very good advice. I don’t have a license in your state, so I don’t know the rules specific to your case. But I agree wholeheartedly with the prior poster, and, of course, wish you the best of lucky and a speedy settlement of your claim!

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