House Insurance Committee defers bill that would bar cancellations when homeowners mitigate hazards

The House Insurance Committee on April 29 voluntarily deferred House Bill 408, a measure that would prohibit insurers from cancelling homeowners'policies when policyholders timely complete mitigation steps outlined in an insurer'provided notice.

Representative Corrioso, who carried the bill for Representative Jordan, described the proposal and an amendment concept before the committee. "If you ask someone to do that and they do it, don't cancel them," Representative Corrioso said, explaining the bill seeks to prevent an insurer from rescinding coverage for the same mitigation issue after a homeowner complies.

The committee adopted, by unanimous consent, amendments originating in committee in concept. Corrioso said the changes would replace several references to "nonrenewal" with "cancellation," delete a sentence beginning on line 13 of the bill draft, and add language exempting surplus-lines carriers (specialty underwriters that are typically not subject to state insurance regulations).

Representative Manberg questioned the need for the measure, telling colleagues it "seems like a bill in search of a problem" and asking whether the committee had a documented case in which an insurer required lengthy, costly repairs (he cited a hypothetical $510,000 example) and then canceled coverage despite compliance. "I'd be very interested if one person could come up here and say that it's ever happened," Manberg said.

Corrioso responded that he had not researched a specific case for the hearing and could not speak for the bill's author, but described mitigation notices and post-issuance inspections as routine and said, in his experience, insurers have generally kept policies in force when homeowners completed requested work.

Representative Phelps offered an anecdote as an example of insurer directives the bill targets: "For the record, I did want to give an example of someone having, the insurance company told them to not to use their wood burning stove," she said, and suggested such directives could lead to cancellation if a homeowner did not comply.

With substantive questions remaining and the bill's author absent, Representative Green moved to voluntarily defer House Bill 408 to the committee's next meeting. "Because he's not here, I would ask that this bill be deferred voluntarily, and placed on the agenda for the next meeting," Green said. Seeing no objection, the chair announced the bill was deferred.

The committee's immediate actions were the adoption in concept of committee-originating amendments and the voluntary deferral of HB 408; no formal recorded vote on the bill was taken. The bill will remain on the committee's agenda for a future meeting, where the full text of the amendment and any additional testimony can be considered further.