2017 Maryland Code
Insurance
Title 19 - Property and Casualty Insurance
Subtitle 2 - Homeowner's Insurance Policies
§ 19-209.1. Underwriting standard in homeowner's insurance policy -- Duty to provide statement about deductible.
- (a) In general. -- An insurer that issues a policy of homeowner's insurance that includes a deductible that is equal to a percentage of the "Coverage A -- Dwelling Limit" of the policy, or has adopted an underwriting standard that requires a mandatory hurricane deductible equal to a percentage of the "Coverage A -- Dwelling Limit" of the policy, shall provide an insured with a statement about the deductible at the time the policy of homeowner's insurance is first issued and at each renewal.
- (b) Form and contents. --
- (1) The statement required under subsection (a) of this section shall:
- (i) be titled, in at least 12 point type, "Percentage Deductible Notice";
- (ii) state the actual percentage of the percentage deductible;
- (iii) state the circumstances under which the deductible applies;
- (iv) include an example of how the deductible applies to a loss; and
- (v) include the following statement, or a substantially similar statement, in at least 10 point type:
"Your homeowner's insurance policy contains a percentage deductible, which means that your deductible for a covered loss will be determined by multiplying the dollar amount of your Coverage A -- Dwelling Limit of Liability by this percentage under the following circumstances: (insert explanation of circumstances under which a percentage deductible would be applied)".
- (2) The example required under paragraph (1)(iv) of this subsection may be provided in the following manner:
"If, at the time of a covered loss, a homeowner's insurance policy's Coverage A -- Dwelling Limit of Liability is $ 300,000 and the policy includes a 2% deductible, the policyholder will be responsible for paying a deductible of $ 6,000 on a claim for a covered loss ($ 300,000 x 2%). This means that, for example:
If the covered loss to the dwelling is $ 25,000 and the covered loss to personal property is $ 10,000 for a total covered loss of $ 35,000, the policyholder is responsible for paying a $ 6,000 deductible and the insurer is responsible for the balance of the covered loss, or $ 29,000.
If the covered loss to the dwelling is $ 5,000, the policyholder is responsible for paying the entire covered loss because the total amount of the covered loss is less than the percentage deductible, which is $ 6,000.".
- (1) The statement required under subsection (a) of this section shall:
- (c) Required statements by insurer. --
- (1) An insurer may satisfy the requirements of subsection (b) of this section if, on the declarations page of the policy of homeowner's insurance or in a separate statement, the insurer states:
- (i) the actual percentage of the percentage deductible;
- (ii) the dollar amount of the percentage deductible as it relates to the policy of homeowner's insurance; and
- (iii) the circumstances under which the deductible applies.
- (2) The statement shall be titled, in at least 12 point type, "Percentage Deductible Notice".
- (1) An insurer may satisfy the requirements of subsection (b) of this section if, on the declarations page of the policy of homeowner's insurance or in a separate statement, the insurer states:
- (d) Delivery of statement by electronic means. -- The statement required by this section may be delivered by electronic means if the insurer complies with the requirements of ยง 27-601.2 of this article.