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SPONSOR: |
Beam |
DATE TYPED: |
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HB |
933 |
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SHORT TITLE: |
Homeowner Insurance Not-at-Fault Claims |
SB |
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ANALYST: |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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NFI |
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Responses
Received From
Attorney
General’s Office (AGO)
Public
Regulation Commission (PRC)
SUMMARY
Synopsis
of Bill
House Bill 933 prohibits insurance companies
from canceling or not renewing homeowners policies due
to the submission of claims for which the policyholder was not at fault.
Significant
Issues
Due in large part to the recent rise in mold and
other water-related insurance claims across the country, many insurers are now
canceling or not renewing homeowners policies if a water related claim has been
submitted.
Furthermore, homeowners whose policies are
cancelled or not renewed now often find it difficult to obtain coverage
elsewhere because of the insurance industry’s widespread use of a proprietary
data bank called CLUE, whereby homes with a history of water-related claims are
effectually “blacklisted”.
ADMINISTRATIVE IMPLICATIONS
The PRC’s Insurance Division’s one-person Investigations Unit
may have an additional workload if companies resist complying with HB 933.
TECHNICAL ISSUES
The PRC notes it is not clear whether HB 933
will void, for homeowners insurance, the provisions of § 59A-18-29-B, which
give insurance companies the right to cancel any property and casualty
insurance policy without cause during the first 60 days of the original policy
period.
Also, HB 933 could be expanded to prohibit the
raising of homeowners premiums as well as the cancellation and non-renewal of
policies due to the submission of claims for which the policy-holder was not at
fault.