I-Team: Homeowners Dropped By Insurance Companies After Winter Damage
DANVERS (CBS) - Ice dams ravaged Kevin and Karen's Danvers home. Nearly a year later, contractors are still fixing the damage.
But it wasn't just the snow that dumped on the family. Their insurance company left them in a bind too.
"This was our first claim in ten years and when we finally needed them they dropped us. They bailed on us," Kevin told the I-Team.
On top of that, a paperwork mix-up meant they weren't given proper notification. Kevin had to scramble to find new coverage while still fighting to get his house fixed.
"We called two different companies, both said we're red flagged. They won't touch us because our claim is open and they know we're being cancelled," he said. "Now, we're uninsured so now we look like deadbeats."
Finally after dozens of calls, they wound up with the Massachusetts state insurance plan, an option that will cost hundreds more.
There are no hard numbers yet on how many Massachusetts homeowners were dropped this year after filing a claim.
Several contacted the I-Team. The attorney general and Division of Insurance both have an increased number of complaints from homeowners. And insurance agents contacted by the I-Team, say they are also dealing with more non-renewals.
"I want more information from more companies on cancellations and non-renewals," said state Senator Michael Barrett (D-Lexington).
Barrett heads the legislative committee that deals with insurance. He says the system is set up against consumers. After holding statewide hearings on a proposed rate increase, he is filing a bill for more transparency.
"We need advocates for the public, advocates for the insurance companies openly competing to convince a neutral for what the proper rate should be. Who should be cancelled, who should be non-renewed," Barrett told the I-Team.
There are no regulations on when an insurer can cancel or drop a customer, only rules requiring 45 day notice.
Kevin says it's a shame he will have to think twice before using the insurance he has paid good money for.
"Hopefully we don't have a next time, but if we do I'll be thinking of this," he said.
John P. Murphy, a spokesman for the Massachusetts Insurance Federation said in a statement that he isn't aware of any unusual spike in cancellations or non-renewals.
"Most insurance companies do not decide to non-renew a customer based on a single claim event. Typically, insurers consider non-renewing a policy when there have been multiple claims within a certain time frame or there has been a change in the property's condition that increases the risk of loss," said Murphy.