New York insurance regulators ordered two insurers to offer to reinstate 260 homeowners insurance policies after finding the companies improperly canceled or non-renewed the policies.

The New York State Insurance Department began an inquiry into the handling of the policies by Homesite Insurance Co. and Security Mutual Insurance Co. after four of the homeowners filed complaints.

Officials said they reversed decisions by Homesite, based in Boston, Mass., and Security Mutual, based in Ithaca, N.Y., involving the cancellation of policies on some unoccupied homes and coastal area homes, and for premature non-renewal of other policies.

The terminations involving unoccupied homes came to light when a homeowner north of Watertown, in Jefferson County, N.Y., complained that her Security Mutual policy was cancelled while she was in the process of relocating, according to the NYSID.

The woman had advised her insurance agent that she would be putting her home up for sale and that it would be unoccupied while she was relocating. The agent advised her to keep some furnishings in the home. The home was then vandalized, but Security Mutual denied the homeowner’s claim for the damages and cancelled her policy mid-term because the home was unoccupied.

New York insurance law prohibits an insurer from considering non-occupancy as the sole factor in issuing a mid-term cancellation. Non-occupancy may be considered only if it is among other factors that increase risk to a property.

Regulators directed Security Mutual to offer to reinstate the woman’s policy, along with the policies of 19 other homeowners that were also improperly terminated because homes were not occupied. Six of the Homesite policy terminations that were reversed involved unoccupied homes.

While the Jefferson County woman’s policy was reinstated, the insurance company was not compelled to pay her claim for the $1,500 in damages that occurred in the vandalism because of an exclusion in her policy, officials said.

Regulators also reversed was a decision by Homesite to terminate 174 other homeowners’ policies. The terminations were deemed improper because the homeowners failed to receive, as required by law, information about the availability of coverage through the New York Property Insurance Underwriting Association . Some of the termination notices also failed to include information about C-MAP, a program designed to help homeowners obtain insurance in coastal areas, according to officials.

Insurers notifying consumers that policies are not being renewed must state the specific reason for the non-renewals. These notices must be sent to homeowners between 45 days and 60 days prior to the effective date that the policies will not be renewed. Insurers are permitted to non-renew up to 4% of their homeowners’ policies annually on a statewide basis.

Homesite also was directed to offer to renew 60 homeowners’ policies that the company initially decided to terminate before the end of the policy periods. Under the law, homeowners’ policies must remain in effect for a minimum period of three years, except in certain situations, such as when consumers fail to pay premiums.