ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

House: LARA DPA 5-3-1-0

HB 2800: fire insurance; policy cancellation; prohibition

Sponsor: Representative Martinez, LD 16

House Engrossed

Overview

Restricts an insurance producer from cancelling or refusing to renew a fire insurance policy upon the Governor declaring a state of emergency after a natural disaster or wildfire.

History

The Governor may proclaim a state of emergency, which takes effect immediately in an area affected or likely to be affected if the Governor finds existence of extreme peril to the safety of persons or property within Arizona caused by air pollution, fire, flood or floodwater, storm, epidemic, riot, earthquake or other causes as outlined (A.R.S. §§ 26-301 and 26-303).

The Governor may extend the state of emergency for 120 days, but any extension may not be for a period of more than 30 days. The state of emergency terminates after 120 days, unless extended, in whole or in part, by passage of a concurrent resolution of the Legislature. The powers granted to the Governor terminate when the state of emergency is terminated by the Governor or by a concurrent resolution of the Legislature (A.R.S. § 26-303).

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 (A.R.S §§ 20-103, 20-1503 and 20-1507).

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. Prohibits an insurer, upon the Governor declaring a state of emergency after a natural disaster or wildfire, from cancelling or refusing to renew, for the next 60 days, a fire insurance policy with an insured that resides or that is located within a 5 mile radius of the natural disaster or wildfire. (Sec. 1)

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5. HB 2800

6. Initials BSR Page 0 House Engrossed

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