Missoula, MT (KGVO-AM News) – With Montana firmly in the grip of a hot, dry summer, I spoke with Montana State Auditor and Commissioner of Insurance James Brown on Friday about the rules around fire, or what is termed hazard insurance for your home and property.
He said some companies are prematurely canceling fire insurance policies, which may be illegal.
Commissioner Calls Out Companies for Cancelling Fire Insurance Policies
“Our office has been notified lately by Montana consumers that insurance companies are informing them that they’re either canceling or non renewing property insurance policies based on wildfire risk, and the assertion of these insurance companies that do business in Montana is that these homeowners are facing an imminent threat of wildfire,” began Brown. “Because of that, I issued an advisory opinion that reminded insurance companies that, in fact, they cannot cancel or non renew policies based on a ‘perceived imminent threat of wildfire’ when the wildfire occurs miles and miles away.”
Brown used the specific example of the Jericho Fire near Helena and how some insurance companies are reacting.
Commissioner Brown Used the Jericho Fire as an Example
“What we’re seeing is that over here in the Helena area, based on the Jericho Fire, some insurance companies are using that to try to deny or not renew coverage,” he said. “Montanans deserve fair access to property insurance, especially during wildfire season. And I’m just reminding insurers that they cannot use wildfire risk as a blanket reason to deny coverage for properties that are not at immediate risk.”
Brown said some companies have indeed attempted to cancel paid-for insurance policies when a wildfire occurs.
Brown said Some Companies are Wrongly Cancelling Policies
“I can’t see any really legitimate reason to go out and cancel policies when there’s a wildfire that is occurring, right?”, he asked. “Because then you’re taking the risk off the insurance company and putting out on the property owner; and that’s not the way insurance works or and it’s not certainly allowed by Montana law.”
Brown said Homeowners are Responsible for Insuring their Homes
Conversely, Brown said the same principle applies for the homeowner, who is responsible for obtaining hazard insurance in a reasonable amount of time before an imminent threat occurs.
“You can’t just if you see there’s a fire in your area, call and get signed up for insurance,” he said. “Where we see that a lot, as we’ve talked about, is someone will get in a car accident and then call, literally from the wrecked car and get auto insurance. It’s the same concept here. We want to make sure that those insurance companies that do business in Montana are treating their customers right and following Montana law.”
Click here to access the Commissioner’s Website.
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Gallery Credit: AJ Brewster
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.