Can an Insurer Cancel the Policy Because of a Backyard Shooting Range?
Question from an IIABNY member: “Can a carrier cancel a HO policy midterm because the insured has a shooting range out back? The carrier has been on them for 10+ years. The company was surprised to see he had a shooting range, even though the insured had 20+ guns listed on his insurance schedule!”
IIABNY answer: Of course the guy would own 20 guns just for display. Who’d have thought he might actually want to fire them? 😉
Here’s what the law (New York Insurance Law Section 3425) says about midterm cancellation of a Homeowners Policy:
(c) After a covered policy has been in effect for sixty days, or upon the effective date if the policy is a renewal, no notice of cancellation shall be issued to become effective…unless it is based on one or more of the following:…
(2) With respect to personal lines insurance policies:
(A) nonpayment of premium, provided, however, that a notice of cancellation on this ground shall inform the insured of the amount due;
(B) conviction of a crime arising out of acts increasing the hazard insured against;
(C) discovery of fraud or material misrepresentation in obtaining the policy or in the presentation of a claim thereunder;
(D) discovery of willful or reckless acts or omissions increasing the hazard insured against;
(E) physical changes in the property insured occurring after issuance or last annual anniversary date of the policy which result in the property becoming uninsurable in accordance with the insurer’s objective, uniformly applied underwriting standards in effect at the time the policy was issued or last voluntarily renewed; or
(F) a determination by the superintendent that the continuation of the policy would violate or would place the insurer in violation of this chapter.
It sounds like the company is relying on (D), “discovery of willful or reckless acts… increasing the hazard insured against”. However, if the insured has had this range for some length of time, and the company has provided coverage for 10+ years, you have to wonder why the company never “discovered” this before. I didn’t find any court cases on what exactly a “willful or reckless act or omission” is, but I found an Insurance Department opinion that discusses it. The attorney said that the addition of a swimming pool or trampoline is not a reckless act because they “are fairly common household additions”. I’m not sure they would have the same opinion of a shooting range, which is far less common. The department might side with the insurer on this one, though I still think the insurer has led the insured to believe that it approved of the risk by writing coverage all these years.
Topics
