Recent New York State Insurance Department Decision Concerning Prospective Cancellation of Homeowner's Policy

The New York State Department of Insurance issued this interesting opinion concerning an insurer's cancellation notice of a homeonwer's policy to its insured within the first 60 days from the inception of the policy. The cancellation notice gave a prospective date for cancellation. During the time between the cancellation notice and the prospective date, a property loss occurred and the insurer claimed that the insured had made a material misrepresentation at the inception of the policy. The Insurance Department concluded that the New York Insurance Law did not speak to the issue and deferred to New York courts to determine if the prospective cancellation estopped the insurer from rescinding the homeowner's policy.