Nassau County Legislator Kevan Abrahams (D-Hempstead) is reminding residents of a recent decision by the New York State Insurance Department that forbids insurance providers from forcing customers to purchase different policies from the same provider.
“Many of these companies have been telling customers that if they want a home owner’s policy, they need to purchase auto insurance as well,” Abrahams said. “To coerce trusting customers into changing policies under the threat of being dropped entirely goes against the concept of an open market. People have the right to choose what they buy and from whom.”
Allstate and Liberty Mutual were both recently found to be using auto insurance as a factor in whether to renew homeowners’ policies, according to Eric R. Dinallo, superintendent of the state’s insurance office. Liberty Mutual has since reinstated about 380 policies that they had canceled.
Abrahams also applauded U.S. Senator Charles Schumer’s (D-NY) call for the creation of a 16-member commission to study the issue of insurance providers refusing to insure communities with perceived high risk, such as Nassau County.
The commission would study possible solutions to reduce potential risk, including stronger building codes and land-use regulations, and the creation of public-private partnerships to pay for recovery from catastrophic weather. The bill recently passed the Banking committee and will now go to the Senate.
“Abandoning the communities of areas like Nassau County because of the perceived risk of a severe weather event is irresponsible and leaves the residents of these areas with little recourse,” Abrahams said. “People depend on insurance companies to be there for them in a time of great need, but these companies are increasingly ignoring our needs. I support Senator Schumer’s proposed commission, and hope that the Senate does so as well.”
The proposed, bipartisan commission would comprise of members with backgrounds in emergency management, insurance, financial markets, engineering, policy ownership, meteorology and construction. The commission would have to submit a report on Dec. 1, 2008 to the Senate Banking Committee.
For more information, call the Long Island office of the New York State Insurance Department at (516) 248-5886.