Binding Restrictions

For active binding restrictions or more information select the type of peril from the main navigation above to jump to that section.     

wildfire

Tropical Cyclone

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wildfire

Flood Restrictions

At this time, AMsuite® does not automatically stop transactions from occurring during a flood event. Please use resources to monitor for active flood warnings before binding a policy, rewriting a policy, or completing a policy change.

https://www.weather.gov/

https://water.weather.gov/ahps/

Information for all States

The following activities are temporarily prohibited by American Modern for the duration of a flood warning:

  • New business issuance
  • Coverage changes on existing policies
  • Deductible changes on existing policies
  • Policy rewrites

These restrictions apply to new purchases if they are located in the area(s) under potential threat from flood.

Renewal policy activities will continue, provided there are no lapses between policies.

wildfire

Earthquake Restrictions

Active or recently lifted restrictions for earthquake threats will be listed below.

Information for all States

The following activities are temporarily prohibited by American Modern for the duration of a earthquake event:

  • New business issuance
  • Coverage changes on existing policies
  • Deductible changes on existing policies
  • Policy rewrites

These restrictions apply to new purchases if they are located in the area(s) under potential threat from earthquake event.

Renewal policy activities will continue, provided there are no lapses between policies.

wildfire

Other Restrictions

Active or recently lisfted restrictions for other threats which may include but are not limited to: volcanic activity, blizzards, other natural disaster.

Information for all States

The following activities are temporarily prohibited by American Modern for the duration of an other event:

  • New business issuance
  • Coverage changes on existing policies
  • Deductible changes on existing policies
  • Policy rewrites

These restrictions apply to new purchases if they are located in the area(s) under potential threat from but not limited to volcanic activity, blizzards or other natural disaster.

Renewal policy activities will continue, provided there are no lapses between policies.

Frequently Asked questions

A Binding Restriction is when an insurance company temporarily prevents binding of new policies or changes to existing policies for a certain period of time.

Binding Restrictions are used by insurance companies to avoid instances where people may only purchase a policy in reaction to predictions of a potentially catastrophic event, in which the company may pay out a claim before enough money is collected on the policy to appropriately balance the financials. Insurance rates are based upon the prediction of claims that are likely to occur within a given year and an unexpected increase in claims could force insurance companies to raise their rates higher to remain profitable.

The primary difference is the reason behind the action taken by an insurance company and the duration of the restriction. Binding Restrictions are put in place in reaction to a potentially catastrophic event (hurricane, wildfire, flood, earthquake, etc.) and may be in effect for days before, during, and after the event has passed. Moratoriums are put in place by insurance companies in reaction to a state Department of Insurance (DOI) mandate to pause certain actions like cancelling policies for weeks or months after an area has been severely affected by a catastrophic event. Business restrictions are put in place by an insurance company to address specific business concerns such as concentration issues and may be in effect for years.

Go to the home page of this website to learn more information about Binding Restrictions, including general guidance and active restrictions. If you have questions not addressed on the website, please contact American Modern at 800-543-2644.

Yes, other property and casualty insurance companies implement Binding Restrictions. However, how a company chooses to implement their restrictions can vary greatly. American Modern may provide general guidelines or implement system programming that prevents binding actions, policies depending on the state and/or type of potentially catastrophic event.

American Modern is developing automated ways to identify catastrophic events and administer these restrictions within our system. Research and testing has been performed to identify the best ways of approaching these restrictions. For instance, the AMIG Wildfire Binding Restrictions Tool uses NASA satellite information to identify hot spots on the ground to provide a daily view of wildfire activity. This provides a near real-time view of active wildfires rather than relying on fire departments to manually update information found in other sources. For hurricanes, American Modern is using NOAA's forecasted information to identify the potentially impacted areas and administering restrictions.

No. Where allowed by the state statutes, Binding Restrictions are administered for both recreational and residential products.

American Modern underwriters and Exception level Delegated Underwriting Authority (DUA) agency partners can, where they deem appropriate (and with proper notation of the reasons supporting the decision), approve binding of policies and policy changes when Binding Restrictions are in effect. Distance to active wildfires can be verified by using the NASA FIRMS websites here: https://firms.modaps.eosdis.nasa.gov/usfs/map/#d:24hrs;@-90.9,40.2,5z.

Insurance agents and partners must contact the Company Underwriter to review situations that qualify for binding restriction exceptions. In Maryland, exceptions may apply pursuant to COMAR 31.08.12.04.

Coverage is subject to policy terms, conditions, limitations, exclusions, underwriting review and approval, and may vary or not be available for all risks or in all states. Rates and discounts vary, are determined by many factors, and are subject to change. Policies are written by one of the licensed insurers of American Modern Insurance Group, Inc., including but not limited to [Optional (except in NY): American Modern Home Insurance Company d/b/a in CA as American Modern Insurance Company (Lic. No. 2222-8) and] American Modern Property and Casualty Insurance Company (CA Lic. No. 6129-1.)

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