HCS HB 142 -- FLOOD INSURANCE

SPONSOR:  Auer (Campbell)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Insurance
by a vote of 10 to 7.

This substitute requires insurance companies to inform
applicants for homeowners' insurance or policyholders of
available coverage for losses caused by storm-sewer backup or
sanitary sewer backup.

FISCAL NOTE:  Estimated Net Increase to Insurance Dedicated Fund
of $0 to $23,650 in FY 2000, $0 in FY 2001, and $0 in FY 2002.

PROPONENTS:  Supporters of the bill say that many homeowners
complained after the deadly and damaging flash flooding in
Kansas City last October that they were unaware of their option
to purchase flood insurance.  This bill requires insurance
companies to notify people about their option to purchase flood
coverage.  In this way, much of the frustration coming out of
claims and rejected claims made this past October will not have
to happen again.

Testifying for the bill were Representative Campbell; and
Metropolitan St. Louis Sewer District.

OPPONENTS:  Those who oppose the bill say that the bill's
language is ambiguous and potentially problematic.  For
instance, the bill is not clear on at what time or how one
proves that an agent made the disclosure.  Also, the bill
requires the agent to inform applicants of their option to
purchase flood insurance, but many insurance policies do not
offer this option. Similarly, agents might not even know if a
particular piece of property is in an area qualified by FEMA for
the National Flood Insurance Program.  Therefore, the bill in
its present form is unworkable.

Testifying against the bill were State Farm Insurance; Missouri
Insurance Coalition; Missouri Association of Insurance Agents;
and Chicago Title Insurance Company.

Marty Romitti, Legislative Analyst

HB 142 -- Flood Insurance for Real Property

Sponsor:  Campbell

This bill requires insurance companies, agents, and brokers to
make prospective policyholders aware of their option to purchase
flood insurance for their real property.  This disclosure may be
done either orally or in writing.  The bill requires this
disclosure even if the real property to be insured does not lie
in a designated floodplain.  In addition, all policy forms for
insuring real property must contain a statement mentioning the
option to purchase flood insurance.  Policyholders sign by this
statement to verify that they understand their option to
purchase flood insurance for their real property.