Can an insurance company cancel my homeowners insurance after payment from Hurricane Sandy?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: May 13, 2013

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Insurance Question from Howard Beach, NY

Asked on 05/13/2013

Can an insurance company cancel my homeowners insurance after payment from Hurricane Sandy? I have State Farm insurance since 1972. After Hurricane Sandy, the company paid us around $50,000 for damages. Now they sent us a notice that they will not be renewing us. In fact, we were told any major insurance company will not not pick us up because of the area we live in. Is this legal? If not, I want to take legal action. I am 78 and handicapped.

Answer given on December 17, 2013

Insurance companies can decide to non renew insurance for homeowners in an area of extreme possibility of constant loss. Most insurance companies have to have permission from the insurance commissioner in the state. They must also be sure they are not singling out one or two homes, but the area in question.In some state, the insurance company amends their underwriting to exclude some of the perils that reflect an increased loss exposure. This is similar to excluding earthquakes in California and hurricanes in Florida and Louisiana. These perils can be purchased separately on the policy from the insurance company or through a separate fund offered by the state or through a state fund.Do not take your insurance company’s word for the inability to obtain insurance with other companies. Shop around, talk to neighbors and see who they are using and if they have problems. You can also talk to your Dept of Ins for help and to see if your company’s actions are approved.

IMPORTANT NOTICE: These answers are for general information purposes only and are provided by the person answering and AS IS. It has not necessarily been reviewed by the management staff of nor is it binding any insurance agent, broker, or other insurance professional or any attorney or insurance company. Insurance laws, regulations and practices vary from state to state and insurance policies and practices differ from company to company, by type of policy, by state and locality and by type of insurance. Tiny variations in the facts, policy language or a detail not set forth in a question often can change the outcome or a professional's conclusion. Although has confirmed that the answer(s) was/were provided for the account of an experienced insurance professional, that professional may not be licensed in the state referred to in the question, and may not be experienced or up to date in the subject area. Unlike the answers provided here, upon which you should NOT rely, for personal advice you can rely upon we suggest you consult a licensed insurance professional in your area or retain a licensed attorney listed on to represent you.

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