Legislators pass new law ahead of hurricane season
New legislation has been signed into law in Rhode Island by Governor Lincoln Chafee and will provide homeowners with additional protection from hurricanes. Last year, homes throughout the state suffered damages caused by Hurricane Irene. The state was able to recover from the natural disaster, but legislators took note of what they considered to be problems in Rhode Island’s insurance system. The legislation aims to solve these problems and improve the state’s defenses against future hurricanes.
Homeowners to be protected against consecutive deductible payments
The legislation will institute limitations on deductibles associated with insurance policies. This provision of the law is designed to ensure that homeowners are not subjected to recurring deductible payments generated by high frequency hurricanes. The new law also provides the Department of Business Regulation to institute new homeowner’s insurance regulations that will govern how claims are to be handled after a disaster is declared by the governor.
Law expected to help insurers deal with future disasters
Lawmakers expect that the new legislation will help both homeowners and insurance companies cope with the problems that arise from a hurricane. This year’s hurricane season is scheduled to begin on June 1, which has put many in the insurance industry on edge. The past two years have played host to devastating natural disasters that have put the industry under enormous financial pressure. Though the industry is prepared to handle yet another disaster-prone year, insurers are weary of doing so.
Law not to take effect until 2013
Rhode Island’s new homeowner’s insurance law is not scheduled to become effective until January 2013. This means that homeowners and insurance providers will have to weather the rest of the year before they can enjoy the benefits introduced by the law. This year’s hurricane season has already generated one storm – Tropical Storm Alberto – but is expected to be somewhat calmer than seasons of previous years. This may bode well for insurers and homeowners, but powerful hurricanes may still be a possibility.