HB 864 -- Property Insurance

Sponsor:  Bland

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.