NU Online News Service, Dec. 16, 2:26 p.m.EST

New York insurance regulators said 113 State Farm policyholders,whom the company wanted to drop because their homes were on thecoast, will be allowed to renew their coverage.

A statement from The New York State Insurance Department said ithad ordered the company to allow the renewals after it investigateda complaint filed by one of the homeowners.

The homeowner said State Farm advised him that it would notrenew his policy because the company was reducing its exposure topotential losses in coastal areas, the department related.

Regulators said they found that the company acted improperly"because the notice failed to advise the homeowner of theavailability of coverage through the New York Property InsuranceUnderwriting Association (NYPIUA), the state's FAIR plan.

According to the department, State Farm's non-renewal noticealso failed to provide contact information for the Coastal MarketAssistance Program (C-MAP). C-Map is administered by NYPIUA to helphomeowners obtain insurance in coastal areas.

The department said investigation of the individual homeowner'scomplaint led to the discovery that the same improper non-renewalnotice had been sent to 112 other Long Islanders.

"The insurance department continues to monitor the situation onLong Island to make sure that insurance remains available and thatthe rules are followed when insurers reduce their exposure.Homeowners have specific rights when policies are non-renewed.Insurers must honor those rights by following the properprocedures," Insurance Superintendent James Wrynn said in astatement.

The department noted Long Island's susceptibility to coastalstorms has led some larger insurers to reduce their exposure topotential losses by non-renewing some homeowners. It mentioned thatunder the law, insurers are permitted to non-renew up to 4 percentof their homeowners' policies annually on a statewide basis.

The department outlined the following steps insurers should takeon non-renewals:

o Homeowners must be advised of the non-renewal between 45 and60 days before the effective date to give them time to obtain areplacement policy.

o Notices sent to homeowners must state the specific reason thepolicy is not being renewed and must advise homeowners of NYPIUAand C-Map.

o Insurers are not required to send notices by registered mail,but they must maintain proof that the notice was mailed in a mannerthat satisfied the 45-to-60-day window.

Non-renewed policyholders were advised to shop for insurance bycomparing the policies, coverage and premiums being offered bymultiple insurers. The department noted that while some insurershave reduced their presence in coastal areas, a number of othershave entered the market.

Mr. Wrynn advised homeowners to take advantage of insurancedepartment resources by reviewing information on the Department'sWeb site http://www.ins.state.ny.us wherethey can also file complaints.