Many policyholders in Puerto Rico are concerned about the notifications of non-renewal or cancellations they received after Hurricane Maria claims. This is an issue that affects both residential and commercial policyholders. The process of obtaining insurance coverage from another insurance company may be even more difficult when repairs related to a previous claim have not been completed.
Due to the serious impact and number of hurricane insurance claims after Hurricane Maria, many local insurance companies have increased the cost of insurance premiums for commercial real estate and have also decided not to renew many of their policies. According to the new and changed Puerto Rico insurance policy, policyholders, especially commercial policyholders, can now look for additional options when local insurance companies refuse 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 meets the requirements and state of any permit. The Insurance Commissioner in Puerto Rico has also established the terms and conditions that an unauthorized insurance company must follow in order to offer surplus to the policyholder in Puerto Rico. 2
There are also requirements that are set under the new insurance code in order for the policyholder to follow before applying for excess coverage. One of the requirements for eligibility is that at least three authorized insurance companies in Puerto Rico deny partial or full coverage. An policyholder must request that an authorized insurance company provide coverage and if the authorized insurance company has not responded within seven days of the request, it would be considered a denial. 3 After three authorized insurance companies in Puerto Rico have denied coverage, the policyholder can apply for coverage from a surplus insurance provider. The hurricane season begins soon, and it is important that commercial policyholders consider all their available insurance cover options.
1 Puerto Rico Insurance Code, Article 10.071, 26 L.P.R.A. Insurers who are eligible for excess lines (amended by the Senate Act 1058 – approved on 1 October 2018).
2 Insurance Code Puerto Rico, article 10.071 (1) e), 26 L.P.R.A. Insurers who are eligible for surplus lines (amended by Senate Post 1058 – approved on October 1, 2018).
3 Insurance code Puerto Rico, article 10.072 (1) (a), 26 L.P.R.A. Insurers who are eligible for surplus lines (amended by the Senate Act 1058 – approved on 1 October 2018).