Requires insurers who issue homeowner policies to obtain a written waiver from homeowners who decline flood insurance protection (OR SEE FISC NOTE)
Impact
By requiring homeowners to sign a waiver, HB723 effectively strengthens the documentation required in the insurance process. This change has implications for how insurers manage their policies and the clarity of communication with policyholders about potentially significant risks, particularly in flood-prone areas. The requirement for a specific form and acknowledgment means that insurers will have better protection against claims that could arise from homeowners claiming ignorance about the availability of flood insurance. The legislation also allows policyholders to apply for flood insurance coverage at any time during the life of their policy, giving them flexibility in managing their insurance needs.
Summary
House Bill 723 mandates that insurers provide homeowners with a written waiver if they choose to decline flood insurance when it is offered. The bill's intent is to ensure that homeowners are formally aware of the option for flood insurance coverage and that their decision to decline this coverage is acknowledged through a signed form. This adds a layer of documentation that aims to protect both the insurers and homeowners from future disputes regarding flood insurance coverage decisions. The legislation establishes that this acknowledgment becomes part of the policy, irrespective of whether it is physically attached to the insurance contract.
Sentiment
The sentiment around HB723 appears to be generally supportive among insurance providers who appreciate the clarification it brings to the consents and waivers involved in the homeowner insurance process. However, some concerns may arise about the potential implications for homeowners who may feel pressured into signing documents without fully understanding the risks associated with declining flood insurance, particularly in regions prone to flooding. There's a balance to be struck between protecting insurers and ensuring that homeowners are adequately informed and not unduly pressured.
Contention
Notable points of contention may arise regarding the adequacy of the information provided to homeowners at the time they are offered flood insurance, as well as concerns about whether the policyholder's signature genuinely reflects a well-informed decision. The rebuttable presumption created by signing the waiver could lead to disputes if homeowners later attempt to claim ignorance of the risks associated with flooding. Furthermore, there might be discussions among legislators regarding whether this requirement could inadvertently disadvantage homeowners who might be inclined to forego what they perceive as unnecessary coverage owing to their personal circumstances.