BOSTON (Legal Newsline) — Massachusetts Attorney General
Maura Healey announced that the Massachusetts Property Insurance Underwriting
Association (FAIR Plan) will pay $350,000 after allegations of impermissibly
canceling homeowners insurance policies between January 2010 and February
Massachusetts State law mandates that, once a homeowners
insurance policy has been in place for 60 days, it can only be cancelled for a
limited number of reasons – such as nonpayment of premiums. The FAIR Plan,
however, allegedly conducted inspections of insurance properties after the
60-day mark. When it found property conditions it did not approve of, Healey’s office
argued it impermissibly cancelled the policies.
“A home is frequently someone’s largest investment and
homeowners should be treated fairly when they purchase insurance to protect
that investment,” Healey said. “This agreement ensures that the FAIR Plan
treats policyholders appropriately when it is considering canceling policies.”
The $350,000 payment will be used as relief for homeowners
who had to purchase more expensive force-placed policies after the FAIR Plan
policies were cancelled. Affected homeowners include residents of Boston,
Brockton, Springfield and Worcester.
The FAIR Plan is an entity jointly managed by the state’s
insurance companies. The goal of the plan is to provide coverage to homeowners
who have been unable to find insurance through the marketplace.