SB1556: As Tornadoes Increase, Oklahoma Homeowners' Insurance Bill is Rejected

Oklahoma homeowners' relief bill dies in legislative session

This article was written with the assistance of ai software*

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What did SB1556 want to accomplish?

SB1556 was a bill relating to homeowner’s insurance; amending 36 O.S. 2021, Section 3639.1, changing the rules for homeowner's insurance in Oklahoma to make them fairer for homeowners.

1. Protection for Homeowners:
2. • It would have stopped insurance companies from canceling a homeowner's insurance policy, refusing to renew it, or raising the cost (premium) after the policy has been active for more than 45 days.
   • This protection would have applied if the homeowner had made their first claim on the policy, if the claim was due to weather-related disasters like storms or tornadoes, or if a natural disaster had been officially declared by the Governor.
3. Exceptions:
4. • There'd be some situations where these protections would not have applied. For example, if the homeowner didn't pay their insurance bill, if they broke safety rules that made the house more dangerous, or if they committed a crime that increased the risk of damage to the house.
5. Notice for Renewal:
6. • If the insurance company wanted to renew the policy, they would have been required to send a written notice to the homeowner at least 30 days before the policy expires. The homeowner would have time to decide if they wanted to continue with the insurance or find a new company.
7. Cancellation by Homeowner:
8. • If the homeowner decided to cancel their insurance policy, they would have been required to send a written notice to the insurance company that includes the date they wanted the cancellation to take effect.
   • The insurance company would then refund any money the homeowner paid for coverage beyond the cancellation date.

These new rules were designed to help protect homeowners from unfair treatment by their insurance companies, especially after they’d faced challenging events like natural disasters.

💥Due to lack of support, missed deadlines, committee action, leadership decisions or veto, this bill failed to pass in this legislative session and will not be signed into law.

Who would have benefited from this law?

This bill was designed to benefit homeowners in Oklahoma. Here’s how:

✔️Fair Treatment:

1. • It wanted to ensure that homeowners are treated fairly by their insurance companies, especially after making a claim. This means insurance companies can’t cancel, refuse to renew, or raise the cost of a policy just because the homeowner made their first claim or experienced a natural disaster.

✔️Financial Protection:

1. • Homeowners would be protected from sudden and unexpected increases in their insurance premiums, which can help them manage their finances better, especially after a costly event like a storm or other natural disaster.

✔️Stability and Peace of Mind:

1. • Knowing that their insurance policy won’t be easily canceled or become too expensive gives homeowners peace of mind and stability. They could feel more secure in their homes, knowing that their insurance will continue to protect them.

What are some possible concerns about this law?

Some of these reasons may be why the bill failed to pass:

⚠️Insurance Company Costs:

Insurance companies might face higher costs because they can't cancel or increase premiums as easily. They may pass these costs on to all customers, potentially leading to higher premiums for everyone.

⚠️Tighter Underwriting:

Insurance companies might become stricter in their initial assessments of new customers to minimize risk, making it harder for some people to get insurance in the first place.

⚠️Potential for Fraud:

By restricting the ability to cancel or increase premiums, there might be an increased risk of fraudulent claims. Homeowners could take advantage of the protections to make claims without fear of penalties, increasing overall costs.

⚠️Reduced Competition:

Some insurance companies might decide to leave the market if they feel they can’t operate profitably under these new rules, reducing competition and possibly leading to higher prices and fewer choices for consumers.

⚠️Complexity and Administration:

Implementing and managing the new rules could add administrative burdens for insurance companies, leading to inefficiencies and higher operational costs, which again might be passed on to consumers.

This bill failed to make it through the legislative process and will not be signed into law at this time.

➡️Is this something that you think Oklahomans need? Will it benefit the county you live in?

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Hi, I'm Judy! I love talking about the area I live in and what affects us. Follow me if you'd like more stories like this.