The legality of an insurer deciding not to renew policies based on an anticipated asteroid impact depends on several factors, including the jurisdiction and the terms of the insurance contract.
Generally, insurance is a state-regulated industry in the United States, and laws vary from state to state regarding when and how insurers can decide not to renew policies. Most states require insurers to provide advance notice to policyholders if they decide not to renew a policy, often specifying a minimum notice period.
Non-renewal decisions must also comply with state insurance laws governing allowable reasons for non-renewal. Insurers generally have broad discretion to decide against renewing a policy as long as they comply with state notice requirements and do not engage in discriminatory practices.
However, the anticipation of a natural disaster, such as an asteroid strike—considered by insurers as an “Act of God”—may or may not be sufficient grounds for non-renewal, depending on state law. In practice, many states may allow non-renewals if the insurer can demonstrate that the risk substantially affects their ability to operate effectively or maintain financial solvency.
Despite this, each case can involve its own complexities, potentially triggering legal challenges. Policyholders might argue that non-renewing based on anticipated events, like an asteroid strike, is not materially different from other equivalent but uncertain disaster risks commonly insured against, such as hurricanes or earthquakes.
Therefore, to determine the specific legality, insurers would need to consult the specific regulatory requirements of the jurisdiction(s) in which they operate and potentially seek legal counsel to ensure compliance and evaluate the potential for any regulatory or policyholder pushback.
