HB 532 -- Property Insurance

Co-Sponsors:  Zweifel, Whorton, Corcoran, Sager, Taylor

This bill makes several changes to the laws governing property
insurance and the Basic Property Insurance Inspection and
Placement Program.  Regarding property insurance in general, the
bill:

(1)  Clarifies that the definition of a property insurance
"claim" does not include an inquiry as to whether a particular
loss is covered by the policy;

(2)  Prohibits property insurers from using an inquiry of whether
a particular loss is covered as a basis for the non-renewal of a
policy;

(3)  Requires that when a property insurance policy is canceled
because of an increase in risk due to a physical change in the
property, that physical change must be "significant";

(4)  Increases the notice period for cancellation of a property
insurance policy from 30 days to 60 days;

(5)  Prohibits a property insurer from citing a generalized term
of "poor credit history" when explaining the reason for
cancellation or non-renewal of a policy;

(6)  Prohibits insurers from using "weather-related claims" as a
basis for non-renewal of a policy.  A weather-related claim is
defined as any loss resulting from an act of God which an insured
is unable to reduce the risk; and

(7)  Prohibits property insurers from using a rating system that
surcharges an insured for weather-related claims or inquires
regarding coverage.

Regarding the Basic Property Insurance Inspection and Placement
Program, the bill:

(1)  Changes the name of the Basic Property Insurance Inspection
and Placement Program to the Fair Access to Insurance
Requirements (FAIR) Plan;

(2)  Increases the maximum liability limits for the plan from
$100,000 to $300,000 for residential property and from $1 million
to $3 million for commercial property;

(3)  Requires the "facility" (the association of insurers that
administers the FAIR Plan) to provide, upon request, a list of
all those insured by the plan;

(4)  Makes all policies issued under the FAIR Plan subject to the
Unfair Claim Settlement Practices Act and the Unfair Trade
Practices Act;

(5)  Requires that when a policy is canceled because of a
physical change in the property, the Department of Insurance must
be provided a copy of the findings at least 10 days before the
cancellation takes effect;

(6)  Requires that the facility must provide the insured with the
actual reason for any cancellation or non-renewal.  The reason
must be given in clear and specific language that a person of
normal intelligence can understand; and

(7)  Adds two members, appointed by the Governor, to the
governing committee of the facility to represent consumers.

Missouri House of Representatives
Last Updated July 25, 2003 at 10:12 am