§ 27-76-2. Hurricane deductibles, triggers, and policyholder notice.
(a) The provisions of this section shall be applicable to policies issuing or renewing
on or after July 1, 2008.
(b) In all instances where an insurance company licensed to do business in this state
offers or includes any deductible and/or mitigation measure related to the deductible
for any type of personal lines residential property insurance on dwelling houses,
the insurance company shall provide prominent and clear notice to insureds that shall
be included in the policy issuance or renewal package and shall fully disclose all
details pertaining to any such deductible and/or mitigation measure.
(c) The insurer may apply a deductible specific to windstorm coverage where:
(1) The deductible is specifically approved by the director and shall not exceed five
percent (5%) of the insured value.
(2) The deductible shall be applicable to losses due to a hurricane during the period
commencing with the issuance of a hurricane-warning bulletin for any part of the state
by the National Hurricane Center and concluding twenty-four (24) hours after the termination
of the last hurricane warning bulletin for any part of the state.
(3) The deductible, whether it is a flat dollar deductible or a percentage deductible,
shall be presented by at least two (2) examples that illustrate the application of
the deductible to the insured. Nothing herein shall prohibit the insurer from providing
any additional information to the insured to assist in the insured's understanding
of the deductible to be applied to the insured's policy.
(4) The deductible set forth above shall not be applied to any insured, if the insured
has installed approved mitigation measures to protect against windstorm damage and
the insurer has either inspected the property or the insured has submitted satisfactory
proof of installation of the approved mitigation measures. The insurance commissioner,
in consultation with the state building code commissioner, shall adopt and may amend
or revise a list of mitigation measures, based so far as reasonably feasible on national
standards for such measures and practices in other comparable states. The list of
mitigation measures adopted by the insurance commissioner shall be considered approved
mitigation measures for purposes of this subsection (c)(4).
(5) For the application of the hurricane deductible on Block Island, losses are due to
a hurricane when a hurricane results in hurricane force sustained winds as reported
by the National Weather Service for Block Island. For the application of the hurricane
deductible in the remainder of the state, losses are due to a hurricane when a hurricane
results in hurricane force sustained winds as reported by the National Weather Service
for any other location in the state. All terms are as defined by the National Weather
Service.
(d) Premium credits shall be applied to policies with deductibles as set forth in subsection
(c) of this section.
(e)(1) An insurer may require mitigation measures to protect against windstorm damage only
after specific approval of the substance of such mitigation measures by the director;
(2) Mitigation measures to be taken by an insured are clearly explained, including a complete
illustration of the dollar impact upon the premiums to be charged to insureds if the
requested mitigation activities are undertaken;
(3) No mandatory deductible for windstorm damage shall be included in the policy;
(4) An insurer shall write the requested coverage at the premium rate that includes the
premium credit to be realized with the completion of the mitigation efforts;
(5) The insurer shall affirmatively state the length of time during which discount given
for the mitigation efforts will apply; and
(6) No insurer shall subsequently nonrenew an insured who has taken the mitigation steps
requested by the insurer for reasons of the insurer's exposure to catastrophe loss,
unless for nonpayment of premium, fraud, breach by the insured of a provision of the
policy, reversal or a lack of maintenance of the mitigation steps, or insurer solvency
concerns or adverse loss history.
(f) Penalties for failure to comply with the provisions of this section shall be administered
by the director in accordance with the provisions of § 42-14-16.
(g) The department of business regulation shall have authority to adopt rules, including
emergency rules, as may be necessary or desirable to effectuate the purposes of this
section.