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Virginia Reminds Insurers of Notification Requirements

April 7, 2015 AAIS Advisory notice

The Virginia Bureau of Insurance is reminding insurers of their obligation to provide several disclosures to applicants and insured's for policies that provide "fire" coverage on its own or in combination with other coverages.

Such coverage includes but is not limited to mobile home policies, dwelling fire policies, homeowners policies, renters policies, commercial fire policies, commercial package policies providing fire coverage, and master policies providing mortgage force-placed fire coverage.

According to a recent administrative letter issued by the bureau, there are several disclosures insurers are required to provide in applicable circumstances. These include disclosures stating:

  • Who to contact regarding the policy, including contact information for the bureau;
  • The minimum coverage required to qualify for replacement cost coverage for an owner-occupied property, and the effect on a claim payment of not meeting the minimum;
  • The availability of homeowners coverage for loss due to water that backs up through sewers and drains;
  • A mandatory offer of building ordinance or law coverage;
  • Any exclusion for flood losses, plus a statement that information on flood insurance, including contents coverage, is available;
  • Any use of credit-related information in underwriting, rating, or "tiering" a policy, plus notice of any "adverse action" arising from the use of credit-based insurance scoring;
  • Any unilateral change in deductibles by an insurer; and
  • When applicable, that coverage for earthquake losses are excluded unless purchased by endorsement.

  1. The latest administrative letter consolidates and supersedes three previous letters (which are withdrawn), and the requirements are in effect immediately.
    AAIS Advisory notices are posted periodically to announce AAIS product developments, and to provide news items that are relevant to our program users. Advisory notices are news summaries that paraphrase documents which should be consulted directly for complete, authoritative information. 

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