N.Y. Moves Against Balboa Insurance Co.’s Handling of Homes Served by Volunteer Firefighters

New York Superintendent of Insurance Gregory V. Serio announced that the Balboa Insurance Company has agreed to initiate immediately training for all of their company’s underwriters in the wake of an on-going New York State Insurance Department (NYSID) investigation into Balboa’s alleeged improper non-renewing of insurance policies for homes protected by volunteer fire departments.

Serio said the company is cooperating in this review of practices utilized by their underwriters to determine the full extent of the problem associated with these non-renewals.

The Firemen’s Association of the State of New York (FASNY) and the Town of Babylon Fire Chiefs Association reported to the insurance department in October 2004 that Balboa had non-renewed a homeowner’s insurance policy on a Coram, N.Y. residence because the property is protected by a volunteer fire department. The department said its Consumer Services Bureau launched an investigation and found that other non-renewals had been issued by the company on Long Island for the same reason.

“Balboa’s actions were clearly a slap to all the dedicated volunteer firefighters of Long Island and throughout the state who selflessly provide professional-level firefighting and emergency medical services to the vast majority of our communities on their own time,” Serio said. “Balboa’s senior management team, once told of the problem by the insurance department and FASNY, quickly recognized the errors committed by their company’s underwriters, and have worked cooperatively with the department to rectify the situation,” Serio continued.

In addition to the improper non-renewal of coverage in Coram, problems were also detected in policies non-renewed on Long Island properties in Commack, Deer Park, Farmingdale and Stewart Manor. Similar irregularities in non-renewals were also found recently in some California policies and the NYSID has been sharing its findings with California’s Insurance Commissioner, John Garamendi.

The NYSID has directed Balboa to review all of its New York underwriting records dating back to 2001 to determine if other improper non-renewal notices were issued.

According to Serio, Balboa Insurance Company, a Santa Ana, California-based insurance group, has provided offers of renewal of homeowners insurance to those Long Island properties cancelled from coverage, in addition to agreeing to the training for its underwriters. He said the department will also be canvassing other carriers writing homeowners insurance to determine if they are also using the issue of volunteer firefighter protection as a basis for non-renewing coverage. The investigation is continuing.

Serio said that homeowners who have their insurance policy non-renewed for reasons they believe to be incorrect or inappropriate, including cancellation because of fire protection being provided by volunteers, are encouraged to contact the department’s Consumer Services Bureau through its toll-free telephone number at 1-800-342-3736 or file a written complaint electronically by logging onto http://www.ins.state.ny.us,