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1996 SESSION

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SB 361 Fire insurance policies; replacement with equivalent property.

Introduced by: Thomas K. Norment, Jr. | all patrons    ...    notes | add to my profiles

SUMMARY:

Fire insurance policies; repair or replacement with functionally equivalent property. Authorizes insurers underwriting fire insurance to offer, as an option, coverage limited to the amount necessary to repair or replace damaged property with functionally equivalent property. Such replacement or repair would be at a lower cost than that required to repair or replace the damaged property with material of like kind and quality. These policies may also permit, at the option of the insured, settlement based on the market value of the damaged property at the time of loss. Current law requires insured property to be repaired or replaced (in the event of a loss) with material of like kind and quality; settlements are based on actual cash value. The bill retains these provisions while authorizing the optional coverage described above. It also requires notice to purchasers of such coverage that under functional replacement cost coverage, claims may be settled for less than the actual cash value of the property insured.


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