This bill requires a homeowner's insurance company to provide disclosure of its surcharge plan to applicants for policies and current policyholders. A surcharge is an increase in premium for a policy based upon a claim. This bill is similar to the current auto insurance statute on surcharges.
Section 1 allows an insurer at policy renewal following a paid loss caused by natural causes to eliminate replacement coverage or to modify deductibles as specified.
Section 2, subdivision 1, provides definitions for purposes of the bill.
Subdivision 2 requires that the insurer or its agent provide a surcharge disclosure statement to an applicant before accepting an initial premium payment for a policy effective on or after January 1, 2012. An insurer may provide the statement on the insurer's Web site if the insurer notifies the applicant of its availability. An applicant must be advised that a written disclosure statement is available.
Subdivision 3 requires an insurer or its agent to provide a surcharge disclosure statement or a written notice of the statement's availability on the insurer's Web site to current policyholders before or with first renewal notice on or after January 1, 2012.
Subdivision 4 provides that failure to comply constitutes a violation of insurance rate standards.
Subdivision 5 gives the Commissioner of Commerce rulemaking authority to carry out the purposes of the bill.