We are in no hurry for another hurricane to strike Hawaii. Hurricane Katrina, however, has created many interesting insurance-related issues. if and when a hurricane strikes Hawaii again, resolution of these issues are bound to impact Hawaii insurance law.
The Associated Press reports Allstate will restore coverage for hundreds of customers in Louisiana whose policies were cancelled after Hurricane Katrina. Customers who sought to increase coverage after Hurricane Katrina were switched to a different Allstate division. Louisiana law prohibits insurers from cancelling policies in effect for three years or longer. Nevertheless, Allstate considered the increase in coverage and switch to a new division to be a new policy, justifying the cancellation of customers' wind and hail coverage. The Illinois Insurance Commissioner investigated these actions by Allstate, whose home offices are in Northbrook, Illinois.
Allstate also agreed to reinstate policies that were cancelled after "drive-by" inspections incorrectly determined policyholders' homes were abandoned after Hurricane Katrina. Allstate did not admit fault, but agreed to pay $250,000 to the State Insurance Commission to avoid expenses that would have been generated by an administrative hearing on the cancellations.
