Senate Bill S7917A

                                 
BILL NUMBER: S7917

SPONSOR: REICHLIN-MELNICK
 
TITLE OF BILL:

An act to amend the insurance law, in relation to homeowner natural
disaster preparedness, home safety and loss prevention courses

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to provide for an actuarially appropriate
reduction in homeowners insurance and insurance that covers property
damage for condominiums, cooperative residential units and for renters
caused by a natural disaster or other insurable events. A residential
property owner could obtain such an actuarially appropriate premium
reduction upon completion of a natural disaster preparedness, home safe-
ty and loss prevention course that is approved by the Superintendent of
the Financial Services Department. The goal of the bill is to raise the
awareness of natural disaster preparedness and losses by other insurable
events by offering such a course for residential property owners. The
ultimate goal being to help reduce the risk exposure faced by property
owners from damage caused by a wide spread natural disasters such as a
hurricane, ice storm, flood, tornado, or other disasters caused by
              

nature or by other insurable events such as fire, theft, burglary,
personal injury or property damage.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Enacts the "Homeowner Natural Disaster, Home Safety and Loss
Prevention Preparedness Program."

Section 2: Legislative intent.

Section 3: Amends Insurance Law section 2346 to add a new subsection (5)
that provides for this actuarially appropriate reduction in homeowners
insurance and for others who live in condominiums, cooperates, or are
renters.

- Provides for a definition of "completion certificate", "natural disas-
ter" and "homeowner natural disaster, home safety and loss prevention
preparedness course".

- Authorizes the Superintendent of Financial Services to provide for an
actuarially appropriate reduction on residential property insurance
premiums for a period of 3 years upon the completion of a homeowner
natural disaster preparedness, home safety and loss prevention course.

The Superintendent may also provide for an actuarially appropriate
reduction in premium rates for the installation of equipment, devices,
or other capital improvements that can help to eliminate or mitigate
natural disaster damage or losses from other insurable events.

- Such coarse, after being submitted for approval to the Superintendent
by a property/casualty insurer, shall provide useful information related
to courses of action that can be taken by a homeowner before, during and
after the occurrence of a natural disaster; strategies to reduce risk
exposure to residential property owners, and information on the kinds of
equipment, devices and other capital improvements made to real property
to help reduce the risk of damage to real property, personal injury or
loss of life. The emphasis of the course is to be on reducing the risk
of damage from natural disasters, but it shall also include information
about increasing home safety and other loss prevention techniques.

- The insurer would provide for the reduction in insurance premiums upon
completion of such a natural disaster, home safety and loss prevention
preparedness course. A completion certificate would need to be issued by
the approved natural disaster preparedness course sponsor and submitted
to the insurance carrier.

- The Superintendent, in consultation with the Commissioner of the Divi-
sion of Homeland Security and Emergency Services, would establish stand-
ards and the curriculum to be used in such homeowner natural disaster,
home safety and loss prevention preparedness course.

 
JUSTIFICATION:

Over the last decade more and more catastrophic weather events have
struck the Northeastern region of the United States. The purpose of this
bill is to encourage homeowners to take a natural disaster preparedness
course to help reduce the risk of property damage, personal injury, and
loss of life that can occur as the result of these increasingly
catastrophic weather events. In addition, by encouraging residential
property owners to take such a class, it is the sponsor's hope to help
reduce the economic and personal injuries that occur due to these weath-
er events. In addition, such course, to increase the cost savings to
consumers and insurance carriers can include items related to home safe-
ty and other loss prevention techniques.

This bill will not adversely affect insurers, in that they would only
give an actuarially appropriate premium reduction that is demonstrated
to reflect real potential property/casualty losses that could be curbed.
Further, this is not a mandate bill in that only those insurers that
wish to offer the course or sanction such a course to provide for such a
premium reduction would need to participate in the program.

New York State law already provides for an actuarially appropriate
reduction on auto insurance rates to those that take a defensive driving
course. This bill merely extends this concept to homeowners' insurance.
Also, as is the case with the driver safety auto insurance premium
reduction course that is already in state law, such premium reduction is
for a three year period of time.

This legislation is part of a package of bills that positions New York
to be better prepared, more resilient and able to provide relief and
recovery assistance to impacted communities quickly.

 
PRIOR LEGISLATIVE HISTORY:

New Legislation

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
January first, next succeeding when the law shall have gone into effect.