Some Insurance Providers Cancelling Policies Due to Asbestos

In certain parts of the country, major insurance providers are refusing to insure homes where asbestos is present, not wishing to assume the risk associated with the mineral, which can cause cancer when its fibers are inhaled.

According to a story aired on a Lake Charles, Louisiana news station, Allstate has started dropping homeowner’s policy holders in that area if their homes feature items such as asbestos siding, roofing, insulation, or floors.

The story was brought to the attention of the media by a viewer whose policy was canceled because of her asbestos siding, which was common in homes in that area that were built prior to the late 1970s.

As a matter of fact, about 20 percent of all homes in the area likely have asbestos siding or other asbestos-containing products, says local insurance broker Stephen Lyons of Lyons Insurance.

He expects other companies will follow Allstate’s lead in dropping their customers as well, making coverage difficult for homeowner’s in the Lake Charles area and in other parts of the country where similar cancellations are occurring.

Lyons told KPLC-TV that there are a lot of factors that determine the risk associated with an older home, but asbestos is one that is harder to assume for some major providers.

“Removal or remediation of asbestos is very expensive,” said Lyons. “There can also be lawsuits from the contamination or the physical damage of the removal of asbestos.”

Lyons admits that the weather conditions and risk of natural disasters in Lake Charles may come into play for these insurance companies and their underwriters, who determine whether insuring a particular property is in the best interest of the company.

“Number one there’s the wind risk factor, number two there’s the water risk factor,” said Lyons, adding that companies like Allstate have no problem writing policies for newer homes but are definitely shying away from insuring older properties, both residential and commercial.

That leaves homeowners with just two options: find another insurer that will assume a higher risk, resulting in higher premiums; or have the asbestos removed and replaced which, of course, can be very costly as it needs to be done properly and by those who are experienced in asbestos abatement.

One fear associated with such behavior on the part of major insurers is that homeowners will take it upon themselves to try to remove dangerous asbestos materials, therefore removing the cost associated with hiring professionals to do the job.

That’s a huge mistake that could result in exposure to deadly asbestos dust and, somewhere down the line, a diagnosis of mesothelioma cancer.