Let’s Play ‘Can They Do That?’


For those who may have missed it, the property casualty insurance markets are in a very hard market cycle. During a hard market, insurance carriers hike premiums, cancel and non-renew policies, and do whatever they can to limit their exposures to loss. Sometimes their actions seem questionable.

Today we launch a new recurring feature called “Can They Do That?” From time to time, we’ll summarize some of the questions the Big I New York Research Department has received about carrier actions. As you read the questions below, keep one thing in mind: These are the ones we’ve received in the last eight working days.

Can a carrier decline to quote personal auto insurance where the household has two licensed drivers and three cars?  Yes. There is nothing in New York Insurance Law or related regulations that prohibits a carrier from doing that.

Does a carrier have to send a conditional renewal notice upon the expiration of a personal auto policy with a one-year term, informing the insured that the renewal will be for six months instead of a year?  No. New York Insurance Law Section 3425(d) requires a carrier to send a conditional renewal notice on a personal lines policy if it wishes to change the limits of insurance or eliminate any coverages.

Can a carrier non-renew a homeowners policy and the rest of the insured’s policies on their third anniversary because of a two-year-old open dog bite claim?  Yes. Section 3425​ permits a carrier to non-renew a non-auto personal lines policy for any reason at the end of the three-year required policy period for any reason that is not otherwise illegal (such as a violation of the Civil Rights Act.)

Can a carrier decline to quote an account for one of its agents and then quote for another of its agents?  Yes, if the carrier’s contract with the agent permits it to do that. There is nothing in New York Insurance Law or related regulations that prohibits a carrier from doing that. Not every poor business practice is illegal.

Can a carrier decline to accept a properly executed cancellation release of a personal auto policy and insist on speaking with the insured before cancelling the policy?  No, unless the policy contains a provision requiring the insured to speak with the carrier before canceling. Every personal auto policy that we have reviewed requires only that the insured give the carrier advance written notice of the date cancellation is to take effect. Any conditions that a carrier imposes beyond that are simply rules someone in their office made up.

These questions or ones like them may arise in your offices at some point. Watch future issues of our ICYMI newsletter for future additions to this topic. We’re reasonably certain there will be more.