Is That a Legal Reason to Non-Renew a Policy?
I often receive questions from IIABNY members about non-renewal notices and the reasons given for non-renewal. The member usually wants to know whether it is legal under New York law for the insurer to non-renew for that reason.
The New York Insurance Department issued an advisory legal opinion on August 7, 2002 that answers this question very succinctly:
An insurer may non-renew a personal lines policy subject to section 3425 for any reason not otherwise prohibited by law (such as race, religion, etc.), in accordance with the insurer’s uniformly applied underwriting rules, and if it is at least 45 days before but not more than 60 days in advance of the expiration of the three-year required policy period.
In this context, when then the attorney refers to a “personal lines policy”, she means a non-auto personal policy (homeowners, umbrella, etc.), but the principle applies to auto and commercial lines policies as well. So long as other New York or federal law does not prohibit a particular reason as the basis for action, the insurer is free to non-renew a policy for that reason.
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