Committee adopts amendment, reports House Bill 1718 to require flood-disclosure notices for homeowners policies

House Insurance Committee members voted to report House Bill 1718 as amended after adopting a change that requires insurers to give homeowners clear disclosures about flood coverage.

Committee staff member Joe told the committee that HB1718 would require insurers that issue or renew homeowners policies to provide consumers with flood-related disclosures, including a statement that a typical homeowners policy does not cover flood damage. "The intent of the bill is to require insurers to disclose that flooding by a natural flood event, such as a creek overflowing or rain based flooding, is not covered under the policy," Joe said.

Representative Resnick, the bill's prime sponsor, framed HB1718 as a consumer-protection measure born of extreme weather in her district. She said a July 2023 storm dropped "7 to 8 inches in a 4 to 6 hour time period," leaving long-time homeowners without flood insurance and, in some cases, without homes. "House Bill 1718 would address these long standing misconceptions and just help consumers make better informed insurance decisions," Resnick said.

Representative David Zimmerman offered Amendment A02355, which the sponsor agreed to. Zimmerman said the amendment lets insurers use their own disclosure form or a model form and requires the form to include: a statement that the homeowners policy does not include flood-loss coverage; a statement that "flooding can happen anywhere"; notice that coverage may be available through the National Flood Insurance Program; and a direction to visit the state insurance department's website for more information. The amendment also exempts insurers when the policy already includes flood coverage.

Committee members expressed support for the change and stakeholder backing was noted. Chair Pickett called for negative votes on the amendment and, hearing none, announced that Amendment A02355 was adopted unanimously.

Representative Vulsomar asked whether there is data on how many carriers currently provide flood disclosures; committee staff member Joe said the office "could not find data on that" and described a brief internal survey in which two staff had received flood disclosures and two had not, a small and nonrepresentative sample that suggests practices vary by insurer. Representative Fritz asked about the bill's use of the phrase "natural flood event;" Joe clarified that the bill's focus is on flooding caused by natural events (for example, a creek overflowing or rain-based flooding) and not on water intrusion from, for example, a backed-up septic tank or sump pump; riders for water and sewage backup exist in some homeowners policies and would not be considered flood under the bill.

After discussion, Chair Pickett asked whether there were negative votes on the bill as amended. None were voiced, and the chair announced that House Bill 1718 was reported as amended out of committee. The committee also noted an upcoming public hearing on House Bill 305 scheduled for Wednesday, February 4 at 9:30 a.m. in 60 East Wing.

The committee adjourned following the business of the day.