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Committee advances bill to restrict assignment-of-benefits and tighten contractor standards after natural disasters
Summary
The House Agriculture & Consumer Affairs Committee voted to pass Senate Bill 201, which narrows the definition of substandard work, prohibits assignment of benefits on homeowners policies for 12 months after a natural disaster, and staggers effective dates to allow insurers time to file new forms.
The House Agriculture & Consumer Affairs Committee voted to pass Senate Bill 201 (LC461228S), a homeowner-protection measure that aims to limit contractor abuses after natural disasters and require insurers to revise policy forms. Senator Larry Walker III presented the substitute and described changes to clarify construction standards and to give insurers time to file new forms.
Supporters said the substitute tightens language that originally used the term “substandard construction,” replacing it with a standard that failures must be “inconsistent with the state minimum standard codes or accredited industry standards.” The substitute also adds a definition of “natural disaster” in Section 3 and sets an effective date of Jan. 1, 2026 for that section; the remainder of the bill would take effect July 1, 2025 if enacted.
Senator Walker said the provision limiting assignment of benefits on homeowners policies for 12 months following a natural disaster responds to reports of unscrupulous contractors taking advantage of disaster-affected homeowners. He said the bill was developed with input from insurance representatives and is supported by the National Insurance Crime Bureau.
Committee members asked no substantive questions after the sponsor explained the substitute. Representative Dawson moved the bill “do pass”; a committee member seconded. The chairman called for a voice vote and recorded unanimous approval by voice (“Aye”). After passage in the committee, Senator Walker said Representative Hagan will carry the bill in the House.
The bill as presented would (1) replace the phrase “substandard construction” with a reference to failures to meet state minimum code or accredited industry standards, (2) add a defined term for “natural disaster” in the bill’s Section 3, and (3) prohibit assignment of benefits on homeowners policies for 12 months after a natural disaster, with the stated phased effective dates to allow insurers time to update filings.
Supporters characterized the changes as consumer protections; sponsors said insurers and the National Insurance Crime Bureau had been consulted. The committee did not amend the substitute at the hearing and passed the measure to the next legislative step.
