Tornadoes and severe storms recently devastated large areas of southern Indiana on March 2, 2012. As a direct response to those events and in an apparent effort to protect policyholders affected by the weather disaster, the Indiana Department of Insurance (“IDOI”) has issued a moratorium on the cancellation of insurance policies. Specifically, the Commissioner of the IDOI is requiring all insurance companies to implement an extension and/or grace period of sixty (60) days in the administration of insurance policies, including both personal lines and commercial lines.
According to the policy cancellation moratorium memo, issued as “Bulletin 191” on March 6, 2012, the moratorium applies only to “cancellations/non-renewals attributed to a failure to pay premiums directly as a result of the Disaster Event during the 60-day period. If a policy is to be cancelled or non-renewed for any other allowable reason, the cancellation or non-renewal may be made pursuant to the statutory notice requirements”.
It is expected that numerous issues regarding coverage and the payment of claims are likely to arise in the aftermath of the weather disaster affecting our state. Policyholders may need to be aware of this moratorium and its potential impact on their policies or coverages. Any questions regarding such issues should be directed to attorneys who typically handle these matters.
Mike Schultz is a partner in the law firm of Parr Richey Frandsen Patterson Kruse with offices in Lebanon and Indianapolis. The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.