House Insurance cancelled

Submitted by rudypoo98 on Tue, 09/06/2011 - 20:49

I had the same house insurance for 22 years I always paid the premiums on time.They merged with a company called BMI which cancelled me because of my credit rating.I will no longer have any insurance on my house now.My husband took off and left me I had credit cards I couldn't pay living on $138 a week matience.This is the most unfair practice there is to cancel someone because of credit rating.What should a credit rating have to do with house insurance when you always paid it.They are saying I lied about my credit rating .I plainly told the agent when she was here I had credit cards I couldn't pay because of him leaving me for a drunk.I want everyone to know what it's like to to live knowing if your house blows away then you are left with nothing.

Posted: 07 Sep 2011 02:45 Post Subject:

It would be very unusual for you to be non-renewed for bad credit, if you have had no claims. I'm assuming the BMI merger meant they were non-renewing all their old policies and offering a new policy by the new parent company.

You may want to contact your state department of insurance to make sure what your insurance company is doing is allowable.

Even with bad credit, you should get homeowners insurance. I know you are upset over the situation with your ex-spouse, but you want to protect your home - how much worse would your position be if you have a house fire?

Even with bad credit you have options, and if no insurance company will offer you coverage, your state has a program to offer coverage. You should have been notified about this option in the cancellation letter sent to you by the insurance company.

Contact several agents, including an independent agent, and I am sure they can find you some coverage which will meet your budget.

Posted: 08 Sep 2011 07:07 Post Subject: How to find that a merge of companies won’t affect me?

How do i know that a merge of companies won't affect me in the same. like canceling my old policy without any valid reason and also refuse to issue a new one. I'm worried as i too have a very old home insurance.
please advise!

Posted: 08 Sep 2011 04:27 Post Subject:

First off, your agent stating that you "lied" about your "credit rating" has absolutely nothing to do with this. Your agent is an idiot. You don't "lie" about your credit rating, you can't "lie" about it in the pure sense. Why not?

Because the insurer is going to run your credit. Specifically, it's not a credit score, but more accurately, an "insurance score." In just about every state, an insurance company is allowed to use insurance scoring as an INITIAL underwriting tool, but they are not able to use an insurance score to affect the insured adversely AFTER the policy has been issued.

Every state in which my company is in says that insurance scores, after the initial underwriting phase, may only be used to improve a person's rates. So, if your credit wasn't good when you bought the policy and is better now, the company must recognize that. On the other hand, if your credit was GOOD in the first place and is NOW bad, the insurer can't do ANYTHING to affect your coverage or premiums. Some states have a condition that allows the insurer to cancel at renewal if there's a "material increase to the hazard being insured." Whether credit falls into this category is still to be determined.

I would get in touch with your state insurance division to see if this practice is legal in your state. The rules might change when one company merges with another. But I doubt it.

InsTeacher 8)

Posted: 09 Sep 2011 06:52 Post Subject: Credit Scores at Renewal- allowed in Georgia

Every state in which my company is in says that insurance scores, after the initial underwriting phase, may only be used to improve a person's rates.

I wish that was the case here in Georgia! A few months ago, one of my two preferred Personal Lines carriers announced that they would be pulling a new score at each renewal! It went into effect on August 1st and it is a nightmare. I've seen a few instances of the premium TRIPLING at renewal!?!? Out of 122 policies renewing in August, we moved 39 to other carriers and lost another 14 altogether due to the astronomical increase. Kicking customers while they're down is NOT the way to build any sort of loyalty...

Posted: 09 Sep 2011 08:45 Post Subject:

Wow, that's really strange when considering Georgia law. To wit:

§ 33-24-91. Use of credit information to underwrite or rate risks

An insurer authorized to do business in this state that uses credit information to underwrite or rate risks, shall not:

(1) Use an insurance score that is calculated using income, gender, race, address, ZIP Code, ethnic group, religion, marital status, or nationality of the consumer as a factor;

(2) Deny, cancel, or nonrenew a policy of personal insurance solely on the basis of credit information, without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by paragraph (1) of this Code section;

(3) Base an insured's renewal rates for personal insurance solely upon credit information, without consideration of any other applicable factor independent of credit information;

(4) Take an adverse action against a consumer solely because he or she does not have a credit card account, without consideration of any other applicable factor independent of credit information;

(5) Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer does one of the following:

(A) Treat the consumer as otherwise approved by the Commissioner of Insurance, if the insurer presents information that such an absence or inability relates to the risk for the insurer;

(B) Treat the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; or

(C) Exclude the use of credit information as a factor and use only other underwriting criteria;

(6) Take an adverse action against a consumer based on credit information unless an insurer obtains and uses a credit report issued or an insurance score calculated within 180 days from the date the policy is first written or renewal is issued;

(7) Use credit information unless not later than every 36 months following the last time that the insurer obtained current credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report. Regardless of the requirements of this paragraph:

(A) At annual renewal, upon the request of a consumer, the insurer shall reunderwrite and rerate the policy based upon a current credit report or insurance score. An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once in a 12 month period. Prior to a consumer exercising his or her option for the insurer to reunderwrite or rerate the policy, the insurer shall notify the consumer orally or in writing that the reunderwriting or rerating of the policy may result in a higher rate, a lower rate, or other possible consequences, including nonrenewal or termination of the policy, or could produce no change for the consumer

When looking at this, I don't see how a carrier could get away with that... In all honesty, there's more to the law than quoted, but I couldn't see, in the balance of the statute, anything that addresses the concern herein.

InsTeacher 8)

Posted: 12 Sep 2011 11:27 Post Subject:

I was just wondering. Can they refuse to renew my policy, even if I make just a single claim?

Posted: 12 Sep 2011 12:03 Post Subject:

Well there’s a lot of things going on, so I guess it’s raising peoples’ fears.

As far as I know an insurance company is not supposed to cancel or refuse to renew your policy for a claim.

Moreover, among other insurance policies, home policy premiums are not very likely to increase after you file a claim.
Homeowner policy insurers generally don’t increase premiums after a single claim, especially if the claimed damage was due to a natural disaster. (Damage due to flood, earthquake, not covered if not under respected insurance.)

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