The Nevada Division of Insurance published a bulletin addressing concerns of insurers canceling newly issued homeowner policies within the first 70 days of policy inception.
State law allows for a 70-day underwriting period, but the Department asks that insurers avoid cancelling late in the period since it can cause unnecessary hardship for policyholders, who may have believed their coverage was secure.
The Department advises that insurers conduct property inspections prior to binding coverage whenever feasible. If a pre-binding inspection cannot be completed, the inspection should occur within a very short period after binding.
Insurers should avoid basing cancellations on inspections conducted late in the 70-day underwriting period unless the basis for cancellation is newly discovered information that could not reasonably have been obtained earlier. Written communications to applicants and policyholders should clearly explain any pending inspection requirements and the potential implications of the inspection results.
Finally, insurers should review and revise their underwriting workflows to ensure that inspection timing does not harm to the consumer.
The bulletin can be found here.