Md. Requires Insurers to Explain ACC Clause

Maryland has enacted a new law requiring insurers that write homeowners policies in the state with anti-concurrent causation clauses to explain these clauses to their policyholders on an annual basis.

Maryland Gov. Martin O’Malley signed into law H.B. 695 on May 2. The law would apply to homeowners policies issued, delivered, or renewed in Maryland on or after Jan. 1, 2014.

It states that “an insurer that issues a policy of homeowner’s insurance in the state that contains an anti-concurrent causation (ACC) clause shall provide a policyholder each year with a notice.”

This annual notice would clearly and specifically describe the ACC clause. This notice would also inform the insured to read the policy for complete information on exclusions.

Maryland also enacted another law this month that would help homeowners avoid a costly trap by predatory contractors.

Maryland S.B. 736 was signed into law by Gov. O’Malley on May 2. The Washington, D.C.-based Coalition Against Insurance Fraud said the law would forbid contractors to offer a rebate on insurance deductibles to lure homeowners into signing contracts that lead to fraud.

The new law states, “It is a fraudulent insurance act for a contractor offering home repair or remodeling services for damages to a private residence caused by weather, to directly or indirectly pay or otherwise compensate an insured, or offer or promise to pay or compensate an insured, with the intent to defraud an insurer, for any part of the insured’s deductible under the insured’s property or casualty insurance policy, if payment for the services will be made from the proceeds of the policy.”

Topics Carriers Homeowners Maryland