For Louisiana Homeowners, it is important to understand when and how your homeowners insurance company can or cannot cancel or refuse to renew your policy.
YOU HAVE A RIGHT TO KNOW WHY
If your insurance company decides it wants to cancel or not renew your policy, you have the right to know why. If you make a written request for the reason of cancellation, the company must respond within six months and specify in writing the reason for the cancellation or refusal to renew.
Any insurer cancelling or refusing to renew a policy providing property, casualty, or liability insurance on any property shall, upon written request of the policy’s named insured, specify in writing the reason or reasons for such cancellation or refusal to renew. Such request shall be mailed or delivered to the insurer within six months after the effective date of cancellation or expiration. LSA-R.S. 22:1265 A (1)
NO CANCELLATION FOR ACTS OF GOD
You should be aware that your insurance company cannot cancel, refuse to renew or increase the amount of the premium on your homeowners policy based solely on a loss caused by an “Act of God.” An “Act of God” is defined as an incident due directly to natural causes and exclusively without human intervention. However, the company may make such changes to your policy due to an “Act of God” if they make the changes on an area-wide rating basis at the beginning of a new policy period.
REASONS FOR CANCELLATION, NONPAYMENT OF PREMIUM, FRAUD, MATERIAL CHANGE IN RISK, NUMBER OF CLAIMS
Your insurance company cannot, however, cancel, refuse to issue, fail to renew or increase the deductible of your homeowners policy if it has been in effect and renewed for more than three years, unless certain conditions apply. Such conditions include: nonpayment of premium, insurance fraud committed by the insured, a material change in the insured risk, two or more claims within a period of three years, or if the continuation of your policy endangers the solvency (financial stability) of the company.
No insurer providing property, casualty, or liability insurance shall cancel or fail to renew a homeowner’s policy of insurance or to increase the policy deductible that has been in effect and renewed for more than three years unless based on nonpayment of premium, fraud of the insured, a material change in the risk being insured, two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date, or if continuation of such policy endangers the solvency of the insurer. This Subsection shall not apply to an insurer that withdraws from the homeowners’ insurance market in this state or to policy deductibles increased for all homeowners’ policies in this state. For the purposes of this Subsection, an incident shall be deemed a claim only when there is a demand for payment by the insured or the insured’s representative under the terms of the policy. A report of a loss or a question relating to coverage shall not independently establish a claim. As used in this Subsection, the phrase “two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date” shall not include any loss incurred or arising from an “Act of God” incident which is due directly to forces of nature and exclusively without human intervention. LSA-R.S. 22:1265 D
CANCELLATION NOT PERMITTED FOR OWNERSHIP OR POSSESSION OF ATV
Further, your insurance company cannot, however, cancel, refuse to issue, and fail to renew your homeowner’s policy solely because you own or possess an all – terrain vehicle (ATV). However, the insurer can exclude coverage for damage incurred or arising from the operation of an all-terrain vehicle.
No insurer providing property, casualty, or liability insurance shall cancel or refuse to issue or fail to renew a homeowner’s policy solely on the basis that the insured owns or possesses an all-terrain vehicle (ATV). The provisions of this Subsection shall not prohibit an insurer providing property, casualty, or liability insurance from specifically excluding coverage for damage incurred or arising from the operation of an all-terrain vehicle. . LSA-R.S. 22:1265 C