Coverage and claim obligations associated with 19-202, Annotated Code of Maryland, Insurance Article and COMAR 31.08.14

Bulletin 19-12 Date: July 25, 2019 To: All Property & Casualty Insurers All Property & Casualty Producers Re: Coverage and claim obligations associated with § 19-202, Annotated Code of Maryland, Insurance Article and COMAR 31.08.14 ********************************************************************************************* This Bulletin provides important information for all Property & Casualty insurers and producers with respect to the obligations arising from Section 19-202 of the Insurance Article, entitled “Coverage for Water Damage.” In the aftermath of multiple significant rain events that took place across Maryland in the Spring and Summer of 2018, the Maryland Insurance Administration (“Insurance Administration”) became aware of non-compliance situations involving both the coverage offer requirement imposed by this statute and the handling of claims made by policyholders who had purchased the coverage in question. This Bulletin will serve to remind insurers and producers of the requirements imposed by this statute. §19–202. Coverage for water damage. (a) An insurer that issues, sells, or delivers a homeowner’s insurance policy shall at time of application and renewal offer in writing to provide coverage for loss that: (1) is caused by or results from water that backs up through sewers or drains; and (2) is not caused by the negligence of the insured. (b) If an application or renewal is made by telephone, the insurer is deemed to be in compliance with subsection (a) of this section if, within 7 calendar days after the date of application or renewal, the insurer sends the offer to the applicant or insured by a first– class mail tracking method. (c) If an application or renewal is made using the Internet, the insurer is deemed to be in compliance with subsection (a) of this section if the insurer provides the offer to the applicant or insured prior to submission of the application or renewal. (d) An offer required by this section may be delivered by electronic means if the insurer complies with the requirements of § 27–601.2 of this article. (e) An insurer may comply with the renewal notice requirements of this section by sending the notice authorized by § 19–216 of this subtitle. AL REDMER, JR. Commissioner NANCY GRODIN Deputy Commissioner LARRY HOGAN Governor BOYD K. RUTHERFORD Lt. Governor 200 St. Paul Place, Suite 2700, Baltimore, Maryland 21202 1-800-492-6116 TTY: 1-800-735-2258 www.insurance.maryland.gov