Department of Insurance exam of practices results in $350,000 penalty for Homesite Insurance Company
News: 2013 Press Release
SACRAMENTO - The Department of Insurance announced today that Homesite Insurance Company has agreed to pay a penalty of $350,000, and refund $10,522 in premium overcharges to over 70 California policyholders.
"Ensuring that insurance companies are conducting business according to all laws and regulations, and in a responsible, fair and consistent manner is essential in our effort to protect consumers and maintain confidence in the insurance industry," said Commissioner Jones. "This case is a good example of why market conduct examinations are an important part of what we do to protect consumers."
According to department examiners, Homesite improperly used property inspection information in rating and underwriting policies as well as misrepresented how property inspection information would be used. Additionally, Homesite did not collect all underwriting information required by law and used loss history reports improperly and used replacement cost calculation software incorrectly when performing replacement cost calculations. The insurer also failed to respond in a timely manner to department inquiries regarding insurance claims.
Homesite agreed to correct all issues identified in the exam report. Homesite writes less than one percent of homeowners' insurance policies in California. The enforcement action resulted from a routine exam by the Field Rating and Underwriting Bureau of the insurer's rating and underwriting practices for the period between May 1, 2008 and July 31, 2008.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.