Bill Text: IA SSB1161 | 2019-2020 | 88th General Assembly | Introduced

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Bill Title: A bill for an act relating to post-loss assignment of rights to residential contractors for repair or services performed on residential real estate covered by property and casualty insurance.

Spectrum: Committee Bill

Status: (N/A - Dead) 2019-02-21 - Subcommittee recommends amendment and passage. [SSB1161 Detail]

Download: Iowa-2019-SSB1161-Introduced.html

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Senate Study Bill 1161 - Introduced
SENATE FILE _____
BY (PROPOSED COMMITTEE
ON COMMERCE BILL BY
CHAIRPERSON CHAPMAN)
A BILL FOR
An Act relating to post-loss assignment of rights to
residential contractors for repair or services performed on
residential real estate covered by property and casualty
insurance.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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Section 1. NEW SECTION . 515.137A Post-loss assignment of
rights or benefits to a residential contractor.
1. This section may be cited as the “Insured Homeowner’s
Protection Act” .
2. As used in this section, unless the context otherwise
requires:
a. “Catastrophe” means the same as defined in section
103A.71.
b. “Residential contractor” means the same as defined in
section 103A.71.
c. “Residential real estate” means the same as defined in
section 103A.71.
d. “Roof system” means the same as defined in section
103A.71.
3. A post-loss assignment by a named insured of rights
or benefits to a residential contractor under a property and
casualty insurance policy insuring residential real estate
shall be subject to all of the following requirements:
a. The assignment shall only authorize a residential
contractor to be named as a co-payee for the payment of
benefits under a property and casualty insurance policy
covering residential real estate.
b. The assignment shall include all of the following:
(1) An itemized description of the work to be performed.
(2) An itemized description of the materials, labor, and
fees for the work to be performed.
(3) A total itemized amount to be paid for the work to be
performed.
c. The assignment shall include a statement that the
residential contractor has made no assurances that the claimed
loss will be fully covered by an insurance contract and shall
include the following notice in capitalized fourteen point
type:
YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER
YOUR INSURANCE POLICY. PLEASE READ AND UNDERSTAND THIS
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S.F. _____
DOCUMENT BEFORE SIGNING.
THE ITEMIZED DESCRIPTION OF THE WORK TO BE DONE SHOWN IN THIS
ASSIGNMENT FORM HAS NOT BEEN AGREED TO BY THE INSURER. THE
INSURER HAS THE RIGHT TO PAY ONLY FOR THE COST TO REPAIR OR
REPLACE DAMAGED PROPERTY CAUSED BY A COVERED PERIL.
d. The assignment shall not impair the interest of a
mortgagee listed on the declarations page of the property
and casualty insurance policy which is the subject of the
assignment.
e. The assignment shall not prevent or inhibit an insurer
from communicating with the named insured or mortgagee listed
on the declarations page of the property and casualty insurance
policy that is the subject of the assignment.
f. A copy of the executed assignment shall be provided to
the insurer of the residential real estate within five business
days after execution of the assignment.
g. The named insured has the right to cancel the assignment
for any reason within five business days from the date the
assignment is executed. The cancellation must be made in
writing. Within ten business days of the date of the written
cancellation, the residential contractor shall tender to the
named insured, the land owner, or the possessor of the real
estate, any payments, partial payments, or deposits that have
been made by such person.
4. Any written contract, repair estimate, or work order
prepared by a residential contractor to provide goods or
services to be paid from the proceeds of a property and
casualty insurance policy shall include in capitalized
fourteen point type the notice as provided in section 103A.71,
subsection 4, paragraph “a” , which shall be signed by the named
insured, and sent to the named insured’s insurance company
prior to payment of proceeds under the applicable insurance
policy.
5. A contract entered into with a residential contractor is
void if the residential contractor violates any provision of
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S.F. _____
this section.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to post-loss assignment of rights to
residential contractors for repair or services performed on
residential real estate covered by property and casualty
insurance.
The bill requires a post-loss assignment by a named insured
of rights or benefits to a residential contractor under a
property and casualty insurance policy insuring residential
real estate to only authorize the residential contractor as a
co-payee for the payment of benefits under the policy.
The post-loss assignment must include an itemized
description of, and the materials, labor, and fees for, the
work to be performed. The post-loss assignment must also
include a total itemized amount for the work to be performed.
The bill requires that the post-loss assignment include a
statement that the residential contractor has not represented
that the claimed loss will be fully covered by insurance and an
additional notice, in 14 point type, as detailed in the bill.
The assignment is prohibited from impairing the interest
of a named mortgagee on the property, or from preventing the
insurer from communicating with the named insured or a named
mortgagee.
The bill requires that after the post-loss assignment
is executed, a copy must be provided to the insurer of the
residential real estate within five business days. The named
insured has the right to cancel the assignment for any reason
within those five business days. If the named insured cancels
the assignment, the residential contractor must return any
payments made by the named insured, the landowner, or the
possessor of the real estate.
Any written contract, estimate, or work order prepared by
the residential contractor must include a notice, as detailed
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S.F. _____
in the bill, advising the named insured that the named insured
is responsible for payment to the residential contractor for
any goods or services provided by the contractor, even if
the named insured does not receive payment from a property
and casualty insurance policy. The notice also advises the
named insured that if the residential contractor advertises
or promises to rebate the named insured’s deductible, or
represents or negotiates, or offers to represent or negotiate
with the named insured’s property and casualty insurer
on behalf of the named insured, the named insured is not
responsible for payment to the contractor under the contract,
estimate, or work order. A copy of the document, signed by the
named insured, must be sent to the named insured’s insurance
company prior to the residential contractor being paid from the
proceeds of the property and casualty insurance.
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