INSURANCE COMPANIES COULD DROP COVERAGE WITH "NO-CAUSE" - Endorsed By Senate Judiciary

(02/28/2004)

The Senate Judiciary Committee has listened to the insurance lobby and has endorsed a bill that could cost thousands of West Virginians their auto policies without cause. State law now has some limitations when an auto insurer can drop a customer who has held a policy for at least two years. In language somewhat complicated, the bill would allow auto insurers to refuse to renew 1.5 percent of their policyholders during the first three years of the measure taking effect. After that, the percentage would drop to 1 percent of policies annually. The bill would allow an insurer to refuse to renew a policy because of any health condition that could impair driving. An insurer could also not renew a policy after two at-fault claims filed within three years. State Farm, the top auto insurer with 385,000 policies,could drop 5,775 policies in the first year alone without cause. Insurance Commissioner Jane Cline said most states allow the dropping of coverage without cause. "This would allow insurers to remove risks from their books," she said. Current insurance law now gives insurers a dozen grounds for non-renewal. They include failing to pay premiums, violating policy terms, a track record of epilepsy or heart attacks and committing an auto-related crime such as drunken driving or hit-and-run.

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