The ISO homeowners forms and Coverages A through F are covered in the national guide. Delaware's homeowners rules are in 18 Del. C. 4120 to 4140 (cancellation, nonrenewal and underwriting) and Regulation 702 (the required disclosure form). They apply to homes of up to four residential units where one unit is the named insured's main residence, plus household property (4120).

Cancellation and nonrenewal

• After the first 60 days, cancellation is limited to listed reasons (4123), such as:
  • nonpayment
  • fraud or material misrepresentation
  • an increased hazard
  • building code violations
  • real estate taxes delinquent two or more years
• Notice periods (4122):
  • 30 days to cancel, with specific reasons
  • 10 days for nonpayment
  • 30 days before the end of the term, either an offer to renew or a notice of nonrenewal with specific reasons
• If the insurer fails to give proper notice, coverage renews on the same terms until the insured accepts replacement coverage or agrees to the nonrenewal.
• Proof of mailing is kept one year.
• Declinations: refusing a written request for coverage, or offering it through another group company or on different terms, counts as a declination. The applicant gets the reasons, or within 21 days of a request made within 90 days (4121, 4122(a)).

Claims and underwriting limits

• Nonrenewal for claims (4130):
  • weather claims alone: 3 or more in the 36 months before expiration
  • other claims: 2 or more in 60 months
  • claims closed without payment can never be the only reason
• Inquiries that aren't claims can't be counted as claims (4131).
• Prohibited reasons (4124):
  • another insurer's earlier declination
  • prior coverage through a residual market
  • the age or location of the home, unless there is a legitimate business reason that isn't a pretext
• Homeowners and auto insurers may not use arrests or charges that didn't lead to a conviction (2304(30)).
• They also may not penalize victims of abuse or volunteer firefighters.
• Credit information can't be the sole reason for an adverse decision (Chapter 83).
• Unoccupied homes: a dwelling can't be excluded as unoccupied unless it has been empty more than 60 consecutive days, and the insured must be told this (4103(5)).

Disclosures and deductibles

• Disclosure form (Reg. 702):
  • titled in at least 30-point type
  • covers flood, replacement cost, theft limits, nonrenewal practices and deductibles
  • must state that the policy doesn't cover flood and explain how to reach the NFIP
  • must say: "Deductibles are not required by state law and are not uniform across insurance companies."
• Wind and hurricane deductibles: the notice explains the dollar effect. The statute's own example: a 2% deductible on a $300,000 home is $6,000 (4140). Notice is given at first issue and at the first renewal after the insurer changes the deductible.
• Statute of limitations: insurers must notify claimants in writing of the deadline to sue (4129).
• Arbitration: homeowners claim disputes may go to arbitration by writing to the Commissioner within 90 days of the settlement offer or denial (Reg. 901).
• Attorney fees: a court awarding judgment against an insurer on a property policy also awards reasonable attorney fees (4102).
• Enforcement: a complaint must be filed within 90 days. Violators may be ordered to reinstate coverage and fined up to $500 per violation (4125).

Exam traps

• 30 days' notice to cancel or nonrenew, 10 days for nonpayment.
• Claims-based nonrenewal needs 3 weather claims in 36 months or 2 other claims in 60 months. Claims closed without payment never count alone.
• The unoccupancy exclusion applies only after 60 consecutive days.