Class Claims Insurers Cancel Just As Hurricane Season Begins

National News

According to Courthouse News, a class action claims Texas insurance companies collect premiums for storm coverage from November through May - when there's no risk of hurricanes - then cancel policies by the thousand just before hurricane season begins. Unitrin, an insurance holding company, allegedly canceled 40 percent of one of its subsidiaries' policies before this year's hurricane season began.

Plaintiffs claim the scheme allows Unitrin and its creatures to fix prices and charge for insurance without providing it. Unitrin has been doing this since 2006, according to the complaint in Jefferson County Court.

When the 2007 hurricane season was predicted to be a big one, the defendants canceled many "hurricane" policies, the class claims. After Hurricane Ike in 2008, Unitrin and its Capitol County subsidiary collected hurricane premiums from policyholders as long as possible, then canceled more than 40 percent of residential policies before the 2009 hurricane season started, according to the complaint.

Such cancellations require the defendants to return unearned premiums, but Unitrin is ducking that by calling its cancellations "non-renewals," the class claims.

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