Prohibits the cancellation, nonrenewal, or increase in premium of an insured's homeowner's insurance policy based on the presence of Chinese drywall or a claim related to Chinese drywall
The passage of HB 668 would significantly alter state laws governing homeowner's insurance policies, particularly concerning materials that have raised concerns within the construction community. Insurance companies will be restricted in their ability to adjust policy terms based solely on the incorporation of Chinese drywall. However, the legislation does allow for rate changes or policy cancellations on an area-wide basis only at the start of a new policy period, which provides some flexibility for insurers while still protecting individual policyholders.
House Bill 668 aims to protect homeowners by prohibiting insurance companies from canceling, nonrenewing, or increasing the premiums of homeowner's insurance policies based on the presence of Chinese drywall. This legislation specifically addresses cases where a claim has been made related to damages arising from the installation of Chinese drywall. By implementing such protections, the bill seeks to ensure that homeowners are not unfairly penalized for having materials that may have originated from specified imports, known for their associated issues.
General sentiment surrounding HB 668 appears to be supportive among homeowners and advocates who appreciate the protections it offers against potential discrimination based on the presence of Chinese drywall. The measure is seen as consumer-friendly and necessary in the face of issues related to the quality of materials used in housing construction. However, there may be some concerns among insurance providers regarding the implications for risk assessment and premium structuring, potentially leading to mixed feelings within the industry itself.
While proponents argue that HB 668 is essential for safeguarding homeowners from unjust insurance practices, critics may raise concerns about the broader implications of regulating how insurance rates are set. Questions around risk assessment and the potential impact on the overall insurance market have surfaced. The allowance for area-wide premium adjustments could lead to disputes among residents in impacted zones over the fairness of insurance terms, challenging the balance between consumer protection and business flexibility.