1     
INSURED HOMEOWNERS PROTECTION ACT

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Rex P. Shipp

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill enacts the Insured Homeowners Protection Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     enacts provisions regarding a post-loss assignment of rights or benefits to a
14     residential contractor under a property and casualty insurance policy;
15          ▸     prohibits a residential contract from rebating or offering to rebate any portion of the
16     insured's deductible to induce the sale of a good or service;
17          ▸     requires a residential contractor to provide certain notices to an insured regarding
18     rights and violations of law; and
19          ▸     declares void an assignment of rights or benefits that violates the Insured
20     Homeowners Protection Act.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:
26     AMENDS:
27          13-50-102, as enacted by Laws of Utah 2013, Chapter 160
28     ENACTS:
29          13-50-301, Utah Code Annotated 1953
30          13-50-302, Utah Code Annotated 1953
31          13-50-303, Utah Code Annotated 1953
32          13-50-304, Utah Code Annotated 1953
33     

34     Be it enacted by the Legislature of the state of Utah:
35          Section 1. Section 13-50-102 is amended to read:
36          13-50-102. Definitions.
37          As used in this chapter:
38          (1) "Rebate" means:
39          (a) any allowance or discount against charged fees; or
40          (b) payment of any form of compensation, except for an item of nominal value, to:
41          (i) an insured; or
42          (ii) a person directly or indirectly associated with a residential building.
43          [(1)] (2) "Repair work" means any work done to siding, gutters, a roof system, or a
44     window system to repair damage caused by wind or hail.
45          [(2)] (3) "Residential building" means a single or multiple family dwelling of up to
46     four units.
47          [(3)] (4) "Residential contractor" means a person that, for compensation, other than
48     wages as an employee, contracts or offers to contract to:
49          (a) perform repair work on a residential building[.];
50          (b) arrange for, manage, or process repair work on a residential building; or
51          (c) serve as a representative, agent, or assignee of the owner or possessor of a
52     residential building for purposes of repair work on the residential building.
53          [(4)] (5) "Roof system" includes roof coverings, roof sheathing, roof weatherproofing,
54     roof framing, roof ventilation, and roof insulation.
55          Section 2. Section 13-50-301 is enacted to read:
56     
Part 3. Insured Homeowners Protection Act

57          13-50-301. Post-loss assignment of rights or benefits to a residential contractor.
58          (1) A post-loss assignment of rights or benefits to a residential contractor under a
59     property and casualty insurance policy insuring a residential building:
60          (a) may authorize a residential contractor to be named as a copayee for the payment of
61     benefits under a property and casualty insurance policy covering the residential building;
62          (b) shall include:
63          (i) an itemized description of the work to be done on the insured residential building;
64     and
65          (ii) the total amount the insured agreed to pay for the work described in Subsection
66     (1)(b)(i);
67          (c) shall include a statement that the residential contractor has made no assurances that
68     an insurance contract will fully cover the claimed loss;
69          (d) shall include a notice in substantially the following form and in capitalized 14-point
70     type:
71          "YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER
72     YOUR INSURANCE POLICY. PLEASE READ AND UNDERSTAND THIS DOCUMENT
73     BEFORE SIGNING.
74          THE ITEMIZED DESCRIPTION OF THE WORK TO BE DONE SHOWN IN THIS
75     ASSIGNMENT FORM HAS NOT BEEN AGREED TO BY THE INSURER. THE INSURER
76     HAS THE RIGHT TO PAY ONLY FOR THE COST TO REPAIR OR REPLACE
77     DAMAGED PROPERTY CAUSED BY A COVERED PERIL.";
78          (e) may not impair the interest of a mortgagee listed on the declarations page of the
79     property and casualty insurance policy that is the subject of the assignment; and
80          (f) may not prevent or inhibit an insurer from communicating with a named insured
81     listed on the declarations page of the property and casualty insurance policy that is the subject
82     of the assignment.
83          (2) A party receiving the assignment described in Subsection (1) shall:
84          (a) deliver the assignment to the insurer of the residential building within five business
85     days after the earlier of the day on which:
86          (i) the assignment is executed; or
87          (ii) repair work begins on the residential building; and
88          (b) cooperate with the insurer of the residential building in an investigation into the
89     claimed loss by:
90          (i) providing each document and record the insurer requests; and
91          (ii) complying with each post-loss duty included in the insurance policy.
92          Section 3. Section 13-50-302 is enacted to read:
93          13-50-302. Residential contractor, prohibited acts.
94          A residential contractor may not rebate or offer to rebate any portion of an insurance
95     deductible as an inducement to the sale of a good or service.
96          Section 4. Section 13-50-303 is enacted to read:
97          13-50-303. Violation notice.
98          (1) Any written contract, repair estimate, or work order that a residential contractor
99     prepares to provide a good or service paid for from the proceeds of a property and casualty
100     insurance policy shall include a notice of the prohibition described in Section 13-50-302 in
101     substantially the following form and in capitalized 14-point type:
102          "IT IS A VIOLATION OF UTAH LAW FOR A RESIDENTIAL CONTRACTOR TO
103     REBATE ANY PORTION OF AN INSURANCE DEDUCTIBLE AS AN INDUCEMENT TO
104     THE INSURED TO ACCEPT A RESIDENTIAL CONTRACTOR'S PROPOSAL TO
105     REPAIR DAMAGED PROPERTY. REBATE OF A DEDUCTIBLE INCLUDES GRANTING
106     ANY ALLOWANCE OR OFFERING ANY DISCOUNT AGAINST THE FEES TO BE
107     CHARGED FOR WORK TO BE PERFORMED OR PAYING THE INSURED
108     POLICYHOLDER THE DEDUCTIBLE AMOUNT SET FORTH IN THE INSURANCE
109     POLICY.
110          THE INSURED POLICY HOLDER IS PERSONALLY RESPONSIBLE FOR
111     PAYMENT OF THE DEDUCTIBLE.".
112          (2) Under any agreement in which a residential contractor provides a good or service
113     paid for from the proceeds of a property and casualty insurance policy, no payment may be
114     made to the residential contractor until:
115          (a) the named insured signs the notice described in Subsection (1); and
116          (b) the residential contractor delivers the notice signed in accordance with Subsection
117     (2)(a) to the named insured's insurance company.
118          Section 5. Section 13-50-304 is enacted to read:
119          13-50-304. Violation of part.
120          A post-loss assignment of rights or benefits entered into with a residential contractor is
121     void if the residential contractor violates a provision of this part.