What's happening
This bill prohibits mortgage lenders from requiring homeowners to buy flood insurance beyond the loan amount or including contents coverage, and mandates a disclosure notice.
Why it matters
Protects homeowners from being over-insured. By limiting flood insurance requirements to the outstanding mortgage amount and prohibiting mandatory contents coverage, the bill prevents lenders from forcing borrowers to pay for more insurance than is necessary to protect the lender’s financial interest.
Reduces unnecessary costs for homeowners. Homeowners are shielded from having to purchase potentially expensive additional flood or contents insurance that may not benefit them directly, potentially lowering monthly housing costs.
Improves transparency and informed decision-making. The required disclosure clarifies for homeowners that lender-required flood insurance may not fully protect their property or belongings, encouraging them to assess and decide on appropriate coverage for their own needs.
Narrows the scope of lender power. By restricting what lenders can require regarding flood insurance, the bill rebalances the relationship between banks and borrowers, giving homeowners more autonomy over the insurance they choose to carry.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Limit Mandatory Flood Insurance
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Substituted by A4770A
- Advanced to third reading
- 2nd report cal.
- 1st report cal.146
- Referred to judiciary
- Returned to senate
- Died in assembly
- Referred to judiciary
- Delivered to assembly
- Passed senateVote 62–0
- Ordered to third reading cal.1769
- Committee discharged and committed to rules
Show 3 earlier actions
- Print number 4629a
- Amend and recommit to judiciary
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit Required Flood Insurance
In Senate Committee · Rules · Sponsor Pamela J. Hunter
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4629--A
2019-2020 Regular Sessions
IN SENATE
March 18, 2019
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the real property law, in relation to prohibiting mortgagees from requiring mortgagors of certain real property to purchase flood insurance exceeding certain limits
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The real property law is amended by adding a new section 283 to read as follows:
§ 283. Limits to compulsory flood insurance. No mortgagee shall require a mortgagor to whom the mortgagee makes, increases, extends, or renews any loan or line of credit secured by improved real property to purchase or pay for flood insurance on such property: (1) at a coverage amount that exceeds the outstanding mortgage thereon; or (2) that includes coverage for contents. In each instance where a mortgagee requires a mortgagor to purchase or pay for flood insurance on such property, the mortgagee shall provide notice to the mortgagor of the need to purchase or pay for flood insurance that states the following in clear and conspicuous print: 'Please note that the flood insurance we are requiring you to purchase will only protect your creditor/lender's interest in your property. It may not be sufficient to pay for many needed repairs after a flood and may not compensate you for your losses in the property due to the flood. If you wish to protect your home or investment, you may wish to purchase more flood insurance than the amount we are requiring you to buy.'
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06962-05-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property law, in relation to prohibiting mortgagees from requiring mortgagors of certain real proper- ty to purchase flood insurance exceeding certain limits
Purpose
To expand the current real property law to include requirements to produce notice between mortgagee and mortgagor on the minimal purchase needed for compulsory flood insurance.
Summary of provisions
Section 1 of the bill adds a new subsection (c-1) of section 283 of the Real Property Law.
Section two provides that this act shall take effect immediately after enactment.
Difference between original and amended version (if applicable)
The bill has been amended to remove language regarding a high deductible flood insurance option. The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), effective April 2015, provides optional high-deductible policies for residential properties. Section 12 of HFIAA introduced a new deductible option of $10,000. The HFIAA also made disclosure of this policy option mandatory on flood insurance applications. With this already enacted, the deductible language is not necessary.
Justification
This bill would limit a homeowner's requirements when purchasing compul- sory flood insurance and provide notice of the minimum insurance liabil- ity that is required. The homeowner is not required by law to buy flood insurance that exceeds the outstanding amounts owed to the bank or covers content within the home. This transparency ensures homeowners are not burdened by additional coverage by insurance companies and banks when mandated to purchase flood insurance.
Additionally, in notifying the homeowner of minimum flood insurance requirements, the notice would include a statement informing the home- owner that minimum flood insurance only covers the bank's interest and may not cover the full value of the home or the belongings inside. Homeowners are encouraged to purchase additional insurance if they desire greater coverage.
Legislative history
2019: A4770
Fiscal implications
None.
Effective date
Effective immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.