Many Policyholders in Puerto Rico are concerned about the notifications of non-renewal or cancellations they received after Hurricane Maria claims. This is a matter that affects both residential and commercial Policyholders. The process of obtaining insurance coverage from a different insurance company can be even more difficult when repairs related to a prior claim have not been completed.

Due to the severe impact and number of hurricane insurance claims after Hurricane Maria, many local insurance companies have increased the cost of insurance premiums for commercial properties and have also decided not to renew many of their policies. Under the new and amended Puerto Rico Insurance Code, policyholders—especially commercial policyholders—can now search for additional options when local insurance companies deny renewals.

Property owners can now be eligible for Surplus lines.1 A surplus line is a coverage offered by an insurance company that is not authorized to do business in Puerto Rico but complies with the requirements and authorization under any state. The Insurance Commissioner of Puerto Rico has also determined the conditions that an unauthorized insurance company should comply with to be eligible to offer a surplus line to a policyholder in Puerto Rico.2

There are also requirements established under the new Insurance Code for a policyholder to comply with before applying for surplus line coverage. One of the requirements for eligibility is that at least three authorized insurance companies in Puerto Rico deny partial or full coverage. A policyholder must request an authorized insurance company to offer coverage and if the authorized insurance company has not responded within seven days of the request it would be considered as a denial.3 After three authorized insurance companies in Puerto Rico have denied coverage then, the policyholder can apply for coverage from a surplus line insurer. Hurricane season will begin soon, and it is important that commercial policyholders consider all their available options for insurance coverage.
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1 Puerto Rico Insurance Code, Article 10.071, 26 L.P.R.A. Insurers Eligible for Surplus Lines (as amended by Senate Bill 1058 – approved on October 1, 2018).
2 Puerto Rico Insurance Code, Article 10.071 (1) (e), 26 L.P.R.A. Insurers Eligible for Surplus Lines (as amended by Senate Bill 1058 – approved on October 1, 2018).
3 Puerto Rico Insurance Code, Article 10.072 (1) (a), 26 L.P.R.A. Insurers Eligible for Surplus Lines (as amended by Senate Bill 1058 – approved on October 1, 2018).

  • Mark Jacoby

    I believe non-renewing or dropping an insured prior to completing the restoration process is ethically unsound and should be banned by the state regulators. Insurers won’t underwrite damaged property until restoration is complete. Lien holders require insurance coverage force policies for lien values leaving the insured completely vulnerable to additional loss beyond the lien value. I liken this to dropping healthcare coverage to a recovering patient leaving the patient without coverage for complications following surgery.

    Underwriters should be required to bridge coverage until recovery is complete and then execute non-renew as an option. How foolish it is to give up premiums for a property you just fixed in the absence of moral or morale issues?

    • Julitza Perez

      Mr. Jacoby, thank you for reading our blog and sharing your thoughts on this topic.