Bill gives home insurance companies a break

By Scott Finn

Staff writer



Insurance companies would find it easier to drop risky homeowners as customers in West Virginia, under a bill approved Monday by a legislative committee.



Every year, an insurance company could refuse to renew policies for up to 1 percent of homeowners in each county the company serves, as long as the company did not discriminate on the basis of sex, race, religion or marital status.



A company could choose to operate under the new law or stick with the current law, which allows them to drop longtime policyholders only for specific reasons, such as fraud, conviction of arson, fire or safety violations, or failure to pay property taxes two years in a row.



The Legislature passed a similar “easy-drop” bill for auto insurance last year. Since then, State Farm Insurance has started selling new auto insurance in the state again.



State Farm no longer writes new insurance policies for homeowners in West Virginia.



Under the bill passed Monday, a homeowner who is dropped and cannot find other insurance could sign up for a state-sponsored policy. The bare-bones policy would cover fire but not general liability claims, and would pay no more than $100,000. A homeowner with a mortgage could lose his home if he could not find adequate homeowners insurance.



Delegate Mike Caputo, D-Marion, was the only member of the interim committee to vote against the bill. He objected to insurance companies being able to drop a customer for any reason.



“I think insurance companies have many reasons to nonrenew a customer already,” he said.



Despite the near-unanimous vote, at least four lawmakers raised their hands to be kept off the list of bill sponsors.