Weather Related Losses
§ 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 such 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
(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 subdivision.
(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 27-76-2(c).
(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
(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 non-renew an insured who
has taken the mitigation steps requested by the insurer for reasons of the
insurers exposure to catastrophe loss, unless for non-payment 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
(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 such rules, including emergency rules, as may be necessary
or desirable to effectuate the purposes of this section.
History of Section.
(P.L. 2012, ch. 64, § 2; P.L. 2012, ch. 83, § 2.)