Two SE Commissioners Warn Insurers About Claims Denials, Policy Cancellations

Two Southeastern states’ insurance commissioners this week posted sternly worded bulletins, warning property insurers about improper policy cancellations and claims denials.

Following severe winter storms that swept across the South early this week, Commissioner Carter Lawrence and Tennessee Attorney General Jonathan Skrmetti urged carriers to “fulfill their contractual and legal obligations.”

“If any company should fail to do right by its customers, if it wrongfully denies claims or otherwise engages in unfair practices, we will not hesitate to act,” the officials said in the posting.

They did not specify what type of action would be considered.

Policyholders who believe their storm-related claims have been wrongly denied can file a complaint through the Tennessee Department of Commerce and Insurance web page, the bulletin noted. It did not say what prompted the memo or the number of complaints that have been received so far this year.

As many as 23 people have died in Tennessee as a result of the winter storms, due to auto accidents, falling trees and extreme cold, according to news reports. Residents also have reported damage from burst pipes and falling limbs. Across the region, estimates of insured losses from the storms have ranged as high as $8 billion.

In Alabama, Insurance Commissioner Mark Fowler updated a December bulletin, which warned that it is unlawful for carriers to cancel or non-renew property or automobile policies solely because of claims arising from catastrophes, or based on a loss from an event unrelated to the line of business in which the policy was placed.

Likewise, insurers must not add a premium surcharge or place policyholders in a higher rating tier. The latest memo extends the notice to new policies written after March 14, 2026, and for renewals after May 14. The bulletins do not prohibit cancellations or nonrenewals due to misrepresentation or fraud by the insured.

The Department of Insurance did not give a reason for the bulletins.

Photo: Nashville saw its share of snow and ice on Jan. 24. (AP Photo/George Walker IV)