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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
House: LARA DP 6-3-0-0 |
HB 2384: fire insurance; wildfire risk modeling
Sponsor: Representative Marshall, LD 7
Caucus & COW
Overview
Requires the Arizona Standard Fire Policy (Policy) to use wildfire risk modeling for specified cities. Instructs an insurer to use a rating plan that takes into account a city or town (municipality) level mitigation designation.
History
An insurance policy is a contract in which an insurer indemnifies an insured against losses from specific contingencies or perils. Fire insurance policies, which insure against perils of fire or lightning, are written under the Arizona Standard Fire Policy. Statute requires the Arizona Standard Fire Policy to conform with the New York Standard Fire Policy. Additional coverage against perils other than those of fire and lightning may be used in connection with the Standard Fire Policy in the form of riders or endorsements (A.R.S §§ 20-103, 20-1503 and 20-1507).
The New York Standard Fire Policy contains standard policy provisions for fire insurance contracts which have become the basic policy for various states, with some states using slight variations. The main provisions include: 1) concealment and fraud; 2) uninsurable and excepted property; 3) perils not included; 4) other insurance; 5) conditions suspending or restricting insurance; 6) other perils or subjects; 7) waiver provisions; 8) cancellation of policy; 9) pro rata liability; 10) requirements in case loss occurs; 11) when loss payable; and 12) subrogation.
For an insurance policy renewal, or a new policy that has been in effect for 60 days, a notice of cancellation must be based on specified occurrences that transpire after the effective date of the policy. If an occurrence meets the outlined conditions and an insurer does not renew a policy, the insured must be given 30 days' notice to remedy the identified conditions. If remedied, coverage must be renewed. If not remedied, the insured may pay the premium and be given an additional 30 days to meet satisfactory conditions (A.R.S. § 20-1652).
If an insurer does not mail or deliver a notice of its intention to not renew a policy to the named insured at the address shown in the policy, the insurer must renew the policy on the effective date of the renewal, upon payment of the premium (A.R.S. § 20-1654).
Provisions
1. Mandates the Arizona Standard Fire Policy to use wildfire risk modeling for any municipality with a population of less than 150,000 persons. (Sec. 1)
2. Requires an insurer to use a rating plan that takes into account a municipality level mitigation designation. (Sec. 1)
3. States that the rating plan must reflect, and that the rate offered must be based on the reduced wildfire risk associated with each municipality level mitigation designation listed as a Firewise USA site in good standing. (Sec. 1)
4. Clarifies that a notice of cancellation is not in effect if it is based on a substantial change in the risk assumed by the insurer, with a minimum substantiated potential loss of $2,000,000 since the policy was issued and removes the exception to this criteria. (Sec. 2)
5. Stipulates that the condition of the premises cannot be a reason for nonrenewal if the condition is not on the premises. (Sec. 2)
6. Clarifies that no declination of insurance coverage or termination of a binder must be based on information from a consumer report with source information collected or produced within the past 60 days. (Sec. 2)
7. Defines wildfire risk model. (Sec. 1)
8. Makes technical and conforming changes. (Sec. 1)
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12. HB 2384
13. Initials BSR Page 0 Caucus & COW
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