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SB2965
THE SENATE
S.B. NO.
2965
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to property insurance
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that property insurance
is critical to the stability of Hawaii's families and communities.
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Property insurance policies protect the
State's homeowners from catastrophic losses caused by wildfires, hurricanes,
tsunami, volcanic eruptions, and other disasters.
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When insurers elect to non-renew policies
without providing notice or an explanation, homeowners are left vulnerable to
coverage gaps and may be forced to seek out less than ideal options, like Fair
Access to Insurance Requirements plans.
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Some homeowners may become uninsured.
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The
legislature notes that other states, including California, Florida, North
Carolina, and Texas, have enacted legal protections for policyholders against
unexpected
non-renewals.
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These protections require
insurers to give policyholders prior notice of, and clear reasons for, the
insurer's intent to non-renew.
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Some
states also require that policyholders be given an opportunity to resolve any
issues prior to the policy's expiration.
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The legislature believes that this opportunity to resolve the issue is
essential, because many non-renewals occur based on repair issues,
documentation gaps, underwriting concerns, or other issues that are correctable.
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The legislature recognizes that, once a
policyholder is dropped by an insurer, it becomes more difficult and expensive for
the policyholder to obtain new insurance.
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Providing an opportunity to resolve any issues will allow homeowners to
take corrective action and to maintain continuous coverage, thereby reducing
instability in both individual households and the broader insurance market.
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The
legislature also notes that requiring insurers to provide policyholders with
notice and an opportunity to resolve any concerns does not increase the
insurer's costs.
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Insurers already
evaluate risks and set premiums based on established underwriting
practices.
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Providing homeowners with
clear reasons for a non-renewal and sufficient time to address them improves
transparency without creating new costs or liabilities for the insurer.
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Accordingly,
the purpose of this Act is to require insurers intending to non-renew a
property insurance policy to provide the policyholder with timely notice,
factual reasons, and an opportunity to address any correctable issues.
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SECTION
2.
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Chapter 431, Hawaii Revised Statutes,
is amended by adding a new section to part IV of article 10E to be
appropriately designated and to read as follows:
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"
�431:10E-
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Intent
to non-renew; notice to insured.
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(a)
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If
an insurer intends to non-renew a property insurance policy, the insurer shall
provide written notice to the insured at least sixty days before the policy
expires.
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The notice shall:
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(1)
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Include the specific factual reasons
for the
non-renewal;
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(2)
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Provide clear instructions for how
the insured can address any stated reasons; and
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(3)
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Be delivered by first-class mail,
electronic transmission, or another reliable method that provides proof of
delivery.
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(b)
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If the reason for non-renewal is correctable,
the insurer shall provide the insured a reasonable opportunity to make the
correction before the policy expires.
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(c)
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Correctable issues shall include:
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(1)
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Completing home repairs or maintenance;
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(2)
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Providing updated documentation or
proof of occupancy;
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(3)
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Addressing underwriting concerns,
such as the removal of specific hazards; or
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(4)
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Resolving administrative or
reporting deficiencies.
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(d)
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If the insured makes the required corrections
prior to the policy's expiration date, the insurer shall rescind the notice of
non-renewal and renew the policy under the existing terms and conditions,
subject to any lawful premium adjustments.
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(e)
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This section shall not apply if the insured:
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(1)
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Fails to pay the policy premium; or
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(2)
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Engages in fraud or a material
misrepresentation related to the insurance policy.
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(f)
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Except as provided in subsection (e), if an
insurer fails to comply with this section, the policy:
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(1)
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Shall remain in effect for an
additional sixty days after the date that the policyholder is given notice
pursuant to this section; or
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(2)
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At the insured's request, shall be
renewed for an additional term of equal length, and under the existing terms
and conditions, subject to any lawful premium adjustments;
provided
that the insured shall continue to meet all obligations under the policy,
including making timely premium payments.
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SECTION
3.
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This Act does not affect rights and
duties that matured, penalties that were incurred, and proceedings that were
begun before its effective date.
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SECTION
4.
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New statutory material is
underscored.
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SECTION
5.
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This Act shall take effect upon its
approval.
INTRODUCED BY:
_____________________________
Report Title:
Property
Insurance; Non-Renewal; Notice; Opportunity to Correct
Description:
Requires insurers intending to non-renew a property
insurance policy to provide the insured with timely notice, factual reasons,
and an opportunity to address any correctable issues.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.