Louisiana orders insurer to end policies for homeowners who don’t renew after 2020 hurricane season

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Louisiana Insurance Commissioner Jim Donelon ordered GeoVera Specialty Insurance Co. to stop renewing Louisiana homeowners’ policies in violation of state law.

In a cease-and-desist order issued last week, Donelon told the California Surplus Line Company it was breaking Louisiana laws that say insurers cannot non-renew policyholders who are customers. for more than three years, except in very limited circumstances.

The commissioner has the power to issue a wide variety of penalties to regulate insurance in the public interest, as outlined in the Louisiana Insurance Code. He can refuse to renew, suspend or revoke an insurer’s certificate of authority or license, or instead of a suspension or revocation, he can impose a fine of up to $ 1,000 for each offense up to $ 100,000 in total.

GeoVera has 30 days to appeal the order.

The action emanates from a consumer complaint to the Louisiana Department of Insurance by a GeoVera client who had filed a claim for damage caused by Hurricane Delta. The policyholder received a non-renewal notice from GeoVera, and the company said it no longer offers homeowner coverage in some zip codes.

Louisiana laws state that owner insurers cannot cancel policies that have been in force for more than three years unless an insured fails to pay their premium, commits fraud, files two or more unsubstantiated claims of God within three years, or if there is a “material change of risk” in the insured property or the insurer is at risk of becoming insolvent.

These three-year protection laws apply to eligible insurers as well as excess line insurers who purchase home insurance policies. They do not apply to commercial policies.

GeoVera had a direct written premium of $ 33,675,411, which represented 1.64% of the Louisiana home insurance market in 2020.

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