The Legislative Session may have ended in partisan rancor, but Big I MN worked hard and successfully navigated the chaos to bring you a number of significant wins on important issues aimed at helping you and clients navigate a challenging market.
The following is a high-level summary of legislation championed by the Big I MN that made it across the finish line. The summary includes bill links as well as page and line references. Stay tuned for a series of videos that will discuss these changes in more depth. In the interim, feel free to contact us with any questions.
A special shout out to the members of the Big I MN Legislative Committee for their support, expertise and willingness to get involved to make a difference.
Robyn Rowen, Big I MN Lobbyist
April Goodin, Big I MN Executive VP & CEO
Protecting MN’s Property Insurance Market by Continuing the Fight Against Storm Chasers
Expanding the Contractor Anti-Rebating Law, SF 4097 (page/line 15.9)
Our top priority this year was to enact legislation preventing storm chasers from taking advantage of homeowners, churning claims and inflating repair costs—all of which exacerbate the premium increases that homeowners are already experiencing.
Accordingly, our Legislative Committee drafted legislation based on a Florida law that does the following:
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- Prevents contractors from offering referral rewards and other incentives to induce homeowners and their neighbors to file insurance claims;
- Requires contractors to provide an insured with a good faith and detailed estimate of materials and services before the insured can sign a contract, taking aim at “price agreed” contracts; and
- Prohibits contractors from providing insurance advice as they solicit insureds for business.
Thanks to the leadership of House Commerce Chair, Zack Stephenson (DFL, Coon Rapids), who set the stage with an informational hearing on climate change and the property insurance crisis, we were able to get our proposal into the House Commerce Policy bill.
Initially the bill’s provisions were limited to roof repairs, however, Representative Tim O’Driscoll (R-Sartel) raised concerns that contractors would find ways to circumvent the bill’s provisions by claiming the rebates or price agreed to contracts were for damage to other areas of the home. We agreed, and Representative O’Driscoll helped us expand the bill’s scope to the “insured’s covered property”.
The contractors fought the proposal until the end of session, but we were able to get our bill across the finish line with the help of member agents who stepped up to testify in committee and to contact their legislators about the importance of our bill. Governor Walz signed the bill into law on May 21st.
Effective August 1, 2024
Expansion of the Price Gouging Law. SF 4097, (page/line 104.15)
The Big I MN also supported an initiative to build upon the success of last year’s residential contractor price gouging law to include tree trimmers and restoration companies. The expanded law will prevent tree trimmers and restoration companies, after a weather event classified as a severe thunderstorm, from charging a consumer an excessive price for labor or from charging an insurer a price that exceeds the price that would be charged to the general public.
Effective August 1, 2024
Eliminating Onerous and Ambiguous Regulatory Requirements
A priority for the Big I-MN is to make it easier for you to do your job by eliminating onerous requirements and clarifying statutory ambiguities that can cause problems for you and your clients. This session, we successfully tackled three particular problems.
Surplus Lines Declinations, SF 4097 (page/line 2.6)
Big I MN partnered with the Surplus Lines Association to successfully eliminate the requirement that MN resident producers must collect three admitted market declinations before placing a risk with a surplus lines carrier.
Effective August 1, 2024
Coordination of Benefits for HOA Loss Assessments, SF 4097 (page/line 10.14)
Big I MN partnered with the DOC and the IFM on legislation to clarify which property owner’s policy will cover a HOA loss assessment. Specifically, the bill provides that it is the property owner at the time of the HOA loss assessment whose insurance policy is responsible for the HOA loss assessment even if there was a different property owner at the time of the underlying loss.
We also added language to the bill to protect property owners, whose policy pays both the claim for the underlying loss as well as the HOA loss assessment, from being charged with two losses by the carrier.
Effective August 1, 2024
Transfer of Death Deeds, HF 3925
The Big I MN supported a bill brought by the Real Property Section of the MN State Bar Association that protects a grantee beneficiary of a transfer on death deed by allowing the existing property coverage to extend for 30 days unless other arrangements are made. In order for the 30-day extension to apply, the grantor must notify the insurer of the existence of the death deed prior to death.
Effective April 26th, but the new law applies to insurance policies issued or renewed on or after August 1, 2024. The new law does not apply to policies issued or renewed before August 1, 2024, unless notice is provided to the insurer in accordance with Section 2 of the new law.
Other Measures Aimed at Alleviating the Property Insurance Crisis
The Insurance Federation of MN championed several initiatives intended to help carriers adjust to the hard market and continue writing in MN. Through negotiations with the DOC, guardrails were added to help consumers understand and navigate the changes. The Big I MN supported the resulting language.
Percentage-Based Deductibles, SF 4097 (page/line 9.12)
This new law will authorize insurers, at the end of a homeowner’s insurance policy period, to offer a deductible that is based on a percentage of a loss solely for losses due to lightening, hail and wind. The insurer must provide 60 days notice of the offer and the offer must include an explanation of how the percentage deductible would work, including an example. The insurer must also offer the insured a “reasonable” flat deductible option that does not exceed the highest percentage deductible.
Effective August 1, 2024
Non-Renewal Based on Weather-Related Claims, SF 4097 (page/line 9.12)
This new law will reverse a long-standing ban on non-renewing a homeowner’s policy based on weather related claims—lightening, hail and wind. Specifically, insurers may non-renew a homeowner’s policy for three or more covered losses each over $10,000 during a five-year period immediately preceding the non-renewal. The new law also requires a 60-day notice to the insured and requires insurers to annually report to the DOC on the number of non-renewals due to weather-related claims.
Effective August 1, 2024
Zip Code Rating Revisions, SF 4097 (page/line 14.3)
Earlier this year the DOC seemed to alter their policy toward geographic rating for homeowner insurance by expanding, to the entire state, the prohibition in 72A.20 on charging different rates for different zip codes within the same town or statutory or home rule charter city. Insurers were unsure how to comply with this altered interpretation and several were concerned that they would need to leave the state.
In response, the IFM negotiated a compromise with the DOC. The new law replaces the existing zip code law and with a prohibition on using more than one geographical rating territory within the same city of the first class or city of the second class that has 60,000 or more inhabitants.
Effective August 1, 2024
