Garamendi says he'll keep fighting 'use-it-and lose-it' policies
By: Associated Press | ∞
SACRAMENTO -- Insurance Commissioner John Garamendi said Tuesday that he won't give up efforts to prevent homeowners' insurers from using "use-it-and-lose-it" policies that result in cancellations for filing legitimate claims.
A state appeals court Monday struck down emergency regulations that were issued by Garamendi to try to stop use of the policies by regulating insurers' use of loss databases.
Garamendi said use of faulty databases was a prime reason for the "use-it-and-use-it" policies.
But the 3rd District Court of Appeal said the law didn't give the commissioner broad powers to regulate homeowners' insurance.
Insurance company representatives praised the decision, saying it would save homeowners who don't file claims from subsidizing those who do.
But Garamendi said homeowners should not be afraid to file legitimate claims.
"The use-it-and-lose-it insurance syndrome is a very real problem with very real victims," he said. "There is not a homeowner in California who doesn't hesitate before filing a legitimate insurance claim. They have a very real and justified fear that they may lose their insurance or be forced to pay significantly more in premiums."
Garamendi said he was waiting for his attorneys to finishing studying the decision before deciding his next move, but he said he would continue to seek legislation controlling homeowners' insurance practices.
Lawmakers approve a bill last year that bars insurers from canceling a policy when a home is being rebuilt following a total loss. But a measure that would have prevented insurers from refusing to renew or sell a policy, or barred them from charging higher rates, because the homeowner had filed one claim in the previous three years died in the Assembly.
On the Net: www.insurance.ca.gov and ww.courtinfo.ca.gov/opinions/documents/C045000
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