The homeowners forms and coverages are explained in the national guide. Arizona's homeowners questions come from its personal property cancellation and nonrenewal law (A.R.S. 20-1651 to 20-1656) and a few underwriting rules about coverage inquiries, consumer reports, and wildfire.

Scope

The law applies to policies covering residential real property with no more than four dwelling units, used mainly as a residence (20-1651).

Cancellation (20-1652, 20-1653)

• After a policy has been in force 60 days, or immediately on a renewal, a cancellation is effective only for a listed ground. Examples are nonpayment, fraud or material misrepresentation, and a substantial change in the risk.
• Notices must be in writing, sent to the named insured, and state the specific facts relied on.
• Proof of mailing to the policy address is sufficient proof of notice (20-1656).
• The insurer and producer are immune from liability for statements in the notice unless made in bad faith with malice (20-1655).
• An insured who believes the action is unlawful may file a written objection with the Director within 10 days of receiving the notice.

Nonrenewal (20-1654)

• The insurer must send notice of its intent not to renew at least 30 days before the policy period ends.
• If notice is late on a policy written for less than a year, the policy may be renewed for a one-year term.
• Moving a policyholder to an affiliated insurer is not a nonrenewal and doesn't start a new 60-day period.
• Condition of the premises. Before nonrenewing for the condition of the premises, the insurer gives the insured 30 days to fix the problem, plus 30 more days if needed and the premium is paid.

Underwriting limits

• Coverage inquiries. A question about whether a loss would be covered is not a claim. It can't be used to decline, cancel, or nonrenew, or be reported as a claim (20-1652(F)).
• Consumer reports. Once 30 days have passed after the application, the insurer may not decline coverage or end a binder based on consumer report information. A physical inspection may still be used (20-1652(E)).
• Wildfire. Rates give due consideration to catastrophe hazards, which include wildfire (20-384(B)). A policy that includes private wildfire protection services must say in bold that those services aren't reviewed by the Department (20-398(C)).
• Insurers may not cancel, nonrenew, or change rates solely because the insured is a victim of domestic violence (20-448(H)).

Flood and earthquake

Standard homeowners forms exclude flood and earthquake. Flood coverage comes from the NFIP or a private flood insurer. Earthquake coverage is added by endorsement or a separate policy.

Common exam traps

• After 60 days, a homeowners policy may be cancelled only for listed grounds, with the specific facts stated.
• Homeowners nonrenewal notice is 30 days. Auto nonrenewal notice is 45 days.
• A coverage inquiry is not a claim.
• Consumer reports can't be used after 30 days from the application.
• Premises problems must be given 30 + 30 days to cure before nonrenewal.