February 19, 2010 – (RealEstateRama) — Insurance Commissioner Jim Donelon announced today his approval of a proposal made by The Hanover Insurance Group to guarantee continued coverage for homeowners policyholders currently insured by The Hanover Insurance Company and Massachusetts Bay Insurance Company. Initially, The Hanover Insurance Group (Hanover) proposed to withdraw Massachusetts Bay Insurance Company and The Hanover Insurance Company from Louisiana and have Gulfstream Property and Casualty Company (Gulfstream) provide coverage to the approximate 10,000 policyholders those two companies presently serve.
Commissioner Donelon initially objected to that proposal out of concern that it would have set a precedent that other insurers would have been able to emulate in violation of our state’s three year protection statute for homeowners insurance consumers and could result in companies “dumping” large numbers of policyholders resulting in a huge influx of for Louisiana Citizens Property Insurance Corporation (Citizens).
On his decision Commissioner Donelon says “This action will guarantee uninterrupted coverage for 14,000 homeowners in our state who may have otherwise lost their insurance and prevent other companies from dumping tens of thousands of policies into the Citizens book of business. Additionally, I am very pleased to welcome Gulfstream into Louisiana as it is a well established company that has been in business for over five years in the Florida market and meets much higher standards than the statutory requirements for writing business in Louisiana.”
It is anticipated that ultimately half of the 14,000 affected policyholders will be covered by Hanover American Insurance Company and the other half by Gulfstream and none will be required to get coverage from Citizens as all will be offered coverage by one of the two previously mentioned companies. All new policies will grandfather with the protection they have acquired under the unique Louisiana homeowners consumer protection law that prevents insurers from cancelling or altering coverage for homeowner’s policies that have been in place for three consecutive years except in rare circumstances. Consumers may call the Department of Insurance Consumer Affairs Division at 1-800-259-5300 or at (225) 342-1258 with any questions or concerns they may have. Questions regarding this press release can be directed to the Louisiana Department of Insurance Public Affairs Office at (225) 342-4950.