Residential Condominium Unit Insurance - Lapses in Coverage - Prohibition on Denial
If enacted, HB 1148 will significantly alter the operational practices of property and casualty insurance providers in Maryland. This legislation will ensure that applicants for homeowner’s and renter’s insurance are not discriminated against solely because of previous lapses in their coverage history. By creating a standardized approach to handling lapsed coverage, the bill encourages insurance accessibility for individuals who may have previously faced challenges in securing insurance after a lapse. The law aims to create a more consumer-friendly environment that aligns with broader initiatives focused on homeowner and renter protections.
House Bill 1148 aims to address issues related to property and casualty homeowner's insurance and renter's residential condominium unit insurance. Specifically, the bill prohibits insurers from denying coverage to applicants based solely on a prior lapse in coverage, provided that the lapse was due to the applicant's choice and not related to any losses or claims history. Additionally, the bill allows insurers to request an affidavit from applicants confirming that they did not incur any losses during the period of lapse. The proposed changes are intended to provide a more equitable insurance landscape for consumers seeking coverage after experiencing gaps in their insurance history.
The sentiment surrounding HB 1148 appears supportive, particularly among consumer advocacy groups and individuals who have struggled with coverage denials due to prior lapses. Proponents of the bill argue that it is a long-overdue reform that enhances consumer rights and protections in the property insurance market. Conversely, some insurers may express concerns over potential increases in risk exposure, particularly if policies are issued to applicants with unstable insurance histories. Overall, the prevailing sentiment is one of optimism for consumer protection and fairness in the insurance process.
The main contention around HB 1148 lies in balancing consumer protection with the risk management responsibilities of insurers. Insurers may worry that prohibiting coverage denial based solely on past lapses could lead to adverse selection where higher-risk individuals continue to seek insurance without proper underwriting. As a result, the insurance market dynamics could shift, prompting concerns over sustainability and financial stability within the sector. Stakeholders will need to navigate these complex issues as the bill moves through the legislative process.