An Act Concerning Homeowners Insurance Policies And Coverage For The Peril Of Collapse.
Impact
The implications of HB 5367 are significant for state insurance regulations as it modifies the baseline coverage requirements for homeowners insurance. By introducing mandatory collapse coverage, the bill ensures that homeowners have protection against structural failures, which could lead to substantial financial losses. This change responds to growing safety concerns about older homes and properties built with substandard practices, thus potentially reducing the number of homeowners facing overwhelming repair costs due to unexpected collapses.
Summary
House Bill 5367 focuses on amending homeowners insurance policies to include coverage for the peril of collapse. The bill mandates that, effective October 1, 2020, all insurance companies delivering or renewing homeowners policies in the state must offer coverage that explicitly encompasses damages caused by the collapse of a dwelling. This includes situations where structural integrity is compromised due to decay or the use of defective materials in construction, aligning the insurance practices with modern risks faced by homeowners.
Contention
While the primary goal of the bill is to enhance consumer protections, some industry stakeholders may express concerns regarding the potential increase in premiums associated with the expanded coverage. Insurance companies might argue that including collapse coverage could necessitate higher premiums to mitigate the increased risk and expense of claims. Additionally, there may be debates surrounding the definitions of 'collapse' and 'mitigation', leading to varied interpretations in policy enforcement and claims processing.
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