The homeowners and dwelling forms, their coverages, conditions and exclusions are covered in the national Homeowners and Dwelling guides. This guide covers the New York rules for residential property insurance: the three-year required policy period and cancellation limits in Insurance Law 3425, notice rules, the FAIR Plan and coastal program, and the New York endorsements named in the exam outlines.

Which policies section 3425 covers

Section 3425 covers personal lines: insurance on residential real property with no more than four dwelling units (not hotels or motels), personal auto, and personal umbrella policies (Ins. Law 3425(a)).

Required policy period and cancellation (Ins. Law 3425)

• Three-year required policy period for homeowners and other covered property policies (auto is one year). During that period, the insurer can cancel or nonrenew only on the listed grounds (3425(a)(7), (c)(2)).
• First 60 days: any cancellation notice must state the specific reason (3425(b)).
• After 60 days, the permitted grounds are (3425(c)(2)):
  • nonpayment of premium,
  • conviction of a crime that increases the hazard,
  • fraud or material misrepresentation,
  • willful or reckless acts that increase the hazard,
  • physical changes that make the property uninsurable, and
  • a determination by the Superintendent.
• Nonpayment: a payment made within 15 days after the nonpayment notice is mailed is on time (3425(a)(10)).
• Nonrenewal or conditional renewal: notice 45 to 60 days before expiration (3425(d)(1)).
• Notices must tell the insured they may be eligible for coverage through the Coastal Market Assistance Program (C-MAP) or the New York Property Insurance Underwriting Association, and how to apply (3425(e)).
• A copy of each notice goes to the agent or broker within 7 days. Missing that step doesn't invalidate the notice (3425(h)(3)).
• Advanced age alone can't be the reason to refuse or nonrenew a covered policy (3425(i)).
• When an insurer terminates an agent, it must offer to keep that agent's personal lines policies for the rest of the required policy period and through the agent for at least the next year, and accept the agent's qualifying new business for 120 days (3425(j)).

The Standard Fire Policy floor

The New York Standard Fire Policy (Ins. Law 3404(e)) lets an insurer cancel on 5 days' notice (10 days to the mortgagee). Section 3425 itself doesn't set a general notice period for homeowners cancellation, so don't assume a 30-day rule. Other Standard Fire Policy terms are in the New York Property and Casualty Basics guide.

Redlining and credit

• An insurer can't refuse, cancel or nonrenew based solely on geographic location, though sound actuarial underwriting is allowed. A person who believes they were redlined can complain to the Superintendent (Ins. Law 3429, 3430; Regulation 90).
• Credit-based insurance scores can't use income, gender, address, zip code, ethnic group, religion, marital status or nationality, and credit can't be used to cancel, nonrenew or raise the renewal premium on personal lines (Ins. Law 2802).

Residual markets

• NYPIUA, the New York Property Insurance Underwriting Association, is New York's FAIR Plan. It provides basic property insurance to owners who can't get it in the voluntary market (Insurance Law Article 54).
• C-MAP, the Coastal Market Assistance Program, helps place homeowners coverage for eligible coastal properties.

New York endorsements on the outline

• HO 01 31 and DP 01 31, Special Provisions - New York, adapt the homeowners and dwelling forms to New York requirements.
• HO 24 93, Workers Compensation - Certain Residence Employees - New York, covers domestic workers who must be covered under the Workers' Compensation Law (those working at least 40 hours a week for the same employer).

Common exam traps

• Three-year required policy period for homeowners; one year for auto.
• After 60 days, only the listed grounds allow cancellation.
• Nonrenewal notice: 45 to 60 days.
• 15 days after a nonpayment notice to cure by paying.
• NYPIUA is the FAIR Plan; C-MAP is the coastal placement program.
• Credit can't be used to cancel, nonrenew or raise the premium at renewal.