New York’s Superintendent of Insurance Gregory Serio announced that a review of terrorism coverages offered by New Hampshire Insurance Company to brownstone property owners has resulted in an agreement with the company to fully disclose terrorism coverage information to its policyholders.
The NYSID said its review “followed an initial inquiry concerning charges for terrorism coverage to brownstone property owners.” Serio stated that the department had now “ensured that policyholders were protected and appropriately covered,” and that the review “resulted in more meaningful action for policyholders who may have had questions concerning their insurance coverage for terrorism.”
He indicated that the NYSID would “continue to closely monitor market practices to protect New York’s policyholders.” The review was prompted by “a consumer complaint regarding the charging of premiums for terrorism coverage on brownstone properties by New Hampshire,” said the bulletin. “New Hampshire subsequently returned a half million dollars in premiums to more than 500 insureds and the Department inquiry prompted a more detailed review of insurance coverages of brownstone properties.
“Under the agreement, New Hampshire will provide all prospective customers and policyholders a letter which discloses that if the units are being occupied for residential purposes the property will be treated as personal lines insurance and will automatically have terrorism coverage included in their policies at no additional charge. The Department will review these consumer notices.”
New Hampshire is a member company of American International Group. AIG companies have also been involved in a review of terrorist coverage in New Jersey where the state’s Compensation Rating and Inspection Bureau is investigating the three cents per hundred dollars of payroll charged to policyholders rather than the established two cents. (See IJ Website October 9)
The NYSID said the main issue concerned “the classification of property as a residential property or commercial property. According to the federal Terrorism Risk Insurance Act, commercial property owners must be given an option to purchase terrorism coverage, while residential property owners are covered for terrorism in their homeowner’s policies and should not pay any additional fees.”
It added that “any New York State homeowners’ who have questions about terrorism coverage should call the Department at 1-800-342-3736.”
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