Allstate Insurance Co., the firm with the largest share of the homeowners insurance market in downstate New York, will stop canceling policies for three months beginning May 1.
Krista Conte, a spokesman for Allstate in New York, said the company will be considering its "next steps" during the suspension of its plan to reduce its exposure to large payouts in coastal communities.
Under state law, insurance companies fearing large payouts after a major storm may not renew up to 4 percent of its homeowner customers statewide each year to reduce risk. Like other insurance companies, Allstate has cited homes close to water as one of the reasons for not renewing homeowner policies on Long Island.
During an insurance forum in Long Beach Thursday night, Ivan Lafayette, deputy superintendent for community affairs with the New York Department of Insurance, said that Allstate customers would be given the opportunity to renew their policies despite any correspondence from the company announcing policy cancellations.
"We've made significant progress toward reducing our exposure to catastrophic loss," Conte said.
Ron Klug, a spokesman for the Insurance Department, said Friday that Allstate approached insurance-industry regulators last week with plans for a temporary halt to cancellations.
"We're very pleased to have that happen," Klug said.
This year, there have been 63 complaints. The state agency investigates consumer complaints and makes a ruling. In 2008, 129 of the 570 complaints were upheld, according to the statistics.
Under state law, an insurance company can only "nonrenew" a policy at the end of a three-year period. Consumers must be advised of the cancellation between 45 and 60 days. Customers must be given a valid reason for the nonrenewal. Nonrenewals are capped at a statewide average of 4 percent, Klug said.
Regulators found that the nonrenewal notices sent by State Farm, second to Allstate in market share, failed to notify homeowners of government-backed insurance programs available to them.