HB0044 Bland, Mary

P R E F I L E D

HB 44 -- Property Insurance (CORRECTED)

The bill requires insurers to insure a person who has an insurable interest in a property, unless the person or property is ineligible. A person is ineligible if the person: has been convicted of arson, robbery, burglary, stealing, or a fraudulent insurance act in the previous 5 years; is seeking to insure property for illegal or potentially hazardous purposes; has been in tax delinquency on the property exceeding 2 years; has failed to pay the premium; or has failed to adequately complete reasonable application questions.

A property is ineligible if it is: nonhabitational property; property exceeding a 4-family dwelling; property that does not comply with housing or safety codes; property that a qualified building inspector decides, based on its physical condition, has a substantial likelihood of loss on the liability portion of the policy; property unoccupied for more than 30 days, if there is evidence of intent to vacate; and certain property next to a physical hazard that has a significant risk of loss.

In addition, the bill allows insurers to refuse to sell replacement cost policies on property whose replacement value exceeds the market value by an extent that creates a moral hazard.

The bill also:

(1) Requires insurers to send a written explanation to the applicant, within 30 days, giving the actual reason for refusing to insure;

(2) Prohibits insurers from penalizing agents because of the geographic location where they sell policies; and

(3) Requires insurance agents to provide eligible persons seeking to insure eligible property with accurate written premium quotations.