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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
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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.
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44 window system to repair damage caused by wind or hail.
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46 four units.
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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.
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54 roof framing, roof ventilation, and roof insulation.
55 Section 2. Section 13-50-301 is enacted to read:
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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 to the assignment described in Subsection (1) shall deliver the assignment
84 to the insurer of the residential building within five business days after the day on which the
85 assignment is executed.
86 Section 3. Section 13-50-302 is enacted to read:
87 13-50-302. Residential contractor, prohibited acts.
88 A residential contractor may not rebate or offer to rebate any portion of an insurance
89 deductible as an inducement to the sale of a good or service.
90 Section 4. Section 13-50-303 is enacted to read:
91 13-50-303. Violation notice.
92 (1) Any written contract, repair estimate, or work order that a residential contractor
93 prepares to provide a good or service paid for from the proceeds of a property and casualty
94 insurance policy shall include a notice of the prohibition described in Section 13-50-302 in
95 substantially the following form and in capitalized 14-point type:
96 "IT IS A VIOLATION OF UTAH LAW FOR A RESIDENTIAL CONTRACTOR TO
97 REBATE ANY PORTION OF AN INSURANCE DEDUCTIBLE AS AN INDUCEMENT TO
98 THE INSURED TO ACCEPT A RESIDENTIAL CONTRACTOR'S PROPOSAL TO
99 REPAIR DAMAGED PROPERTY. REBATE OF A DEDUCTIBLE INCLUDES GRANTING
100 ANY ALLOWANCE OR OFFERING ANY DISCOUNT AGAINST THE FEES TO BE
101 CHARGED FOR WORK TO BE PERFORMED OR PAYING THE INSURED
102 POLICYHOLDER THE DEDUCTIBLE AMOUNT SET FORTH IN THE INSURANCE
103 POLICY.
104 THE INSURED POLICY HOLDER IS PERSONALLY RESPONSIBLE FOR
105 PAYMENT OF THE DEDUCTIBLE.".
106 (2) Under any agreement in which a residential contractor provides a good or service
107 paid for from the proceeds of a property and casualty insurance policy, no payment may be
108 made to the residential contractor until:
109 (a) the named insured signs the notice described in Subsection (1); and
110 (b) the residential contractor delivers the notice signed in accordance with Subsection
111 (2)(a) to the named insured's insurance company.
112 Section 5. Section 13-50-304 is enacted to read:
113 13-50-304. Violation of part.
114 A post-loss assignment of rights or benefits entered into with a residential contractor is
115 void if the residential contractor violates a provision of this part.