Provides for the reduction of property/casualty insurance premiums on residential real property when the insured occupant completed a homeowner natural disaster preparedness, home safety & loss prevention

Summary of specific provisions

Section 1: Legislative intent.

Section 2: 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 disaster", "homeowner natural disaster preparedness, home safety and loss prevention course", and "applicant" who applies for permission and approval to conduct such a class from the Superintendent.

-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 an applicant, such as a property/casualty insurer or a private entity that conducts such risk management classes, 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 catastrophic events such as 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 preparedness, home safety and loss prevention course. A completion certificate would need to be issued by the approved natural disaster preparedness course sponsor, be it the insurer, agent of the insurer or an approved private company that conducts such class and submitted to the insurance carrier.

-The Superintendent may establish standards and guidelines to guide course sponsor applicants on the kinds of homeowner natural disaster preparedness, home safety and loss prevention courses that will be approved.

Justification

Over the last decade or so, it seems that more and more catastrophic weather events have struck the Northeastern portions 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 catastrophic weather events. In addition, such course, to increase the cost savings to consumers and insurance carriers can include items related to home safety and other loss prevention techniques.

This bill will not adversely affect insurers, in that they would only need to 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 provided for by an approved private vendor 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 of providing for a risk management class and risk aversion class 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.

Further, pursuant to Insurance Law section 2346, the law already provides for an actuarially appropriate reduction in homeowners insurance if such homeowner specifically installs stand alone equipment, including, but only exclusively, a sprinkler system, dead-bolts or hurricane storm shutters or hurricane resistant laminated glass windows or doors. This bill merely adds to this list of equipment that can help to reduce the risk exposure to a natural disaster with addition of a class to reduce potential damages, the same as is now the case for those who take the defensive driving class.In a somewhat similar bill S.1529 / A.6846, that passed both houses of the Legislature in 2015, but was vetoed, the sponsors maintain that this concept of a natural disaster preparedness course is not covered under the current law. However, this bill was altered to make it very clear that the bill is making it very clear that this kind of class and premium reduction can be put into effect.

Legislative history

New Bill, but somewhat similar to S. 1529 / A. 6846 that was vetoed in 2015.

Fiscal implications for state and local governments

None.

Effective date

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