The national Homeowners guide covers the ISO HO forms, coverages and exclusions. This guide covers Missouri's homeowners cancellation and nonrenewal law (RSMo 375.001–375.011) and the Missouri basic property insurance inspection and placement program (FAIR plan) (379.810–379.855).

Which policies the cancellation law covers (375.001)

The law applies to fire and extended coverage on owner-occupied dwellings of no more than two families. It doesn't apply to FAIR plan contracts, assigned risk plans, non-habitational property or mobile homes. A policy longer than one year is treated as successive one-year periods that may be ended at an anniversary on 30 days' notice.

Cancellation (375.002, 375.003)

• Underwriting period: the limits on reasons don't apply to a policy in effect less than 60 days when notice is mailed, unless it's a renewal.

• Allowed reasons after that:

  • nonpayment
  • fraud or material misrepresentation
  • policy violations
  • conviction of a crime that increases the hazard
  • physical changes that increase the hazard

  Filing covered claims is not a listed reason.

• Notice: at least 30 days, or 10 days for nonpayment.

  • The reason must be clear enough for a person of average intelligence to understand. "Personal habits" or "living conditions" isn't enough.
  • The notice must mention possible eligibility under the basic property insurance program.

• Offering to bill or reinstate doesn't undo a cancellation.

Nonrenewal (375.004)

• At least 30 days' advance notice of nonrenewal, mailed or delivered.
• No notice is needed if:
  • the insurer showed it was willing to renew
  • the reason is nonpayment
  • the insured said he or she doesn't want to renew
  • the insured didn't pay an advance renewal premium
• Affiliate transfers: if moving a policy to an affiliate changes coverage, the insured gets 15 days' notice.
• Proof of mailing to the address in the policy is enough (375.005).
• Insurers, agents and informants aren't liable for statements in these notices (375.006).

Underwriting limits

• No refusal, cancellation or nonrenewal solely because another insurer did so (375.007).
• No refusal based solely on residence or lawful occupation, unless the hazard actually increases because of it (375.007).
• No refusal, cancellation or limits on a residential property risk because of the age of the property or its geographic location (375.936(11)).

The FAIR plan: basic property insurance program (379.810–379.855)

• The program serves people in good faith entitled to basic property insurance who can't get it through ordinary methods.
• It's run by an all-industry placement facility.
• Basic property insurance is the standard fire policy and extended coverage endorsement, with certain endorsements. It doesn't include auto.
• Maximum limits: $200,000 on habitational property and $1,000,000 on commercial property at one location (379.825).

Inspection and decision

• An inspection may be requested by the owner, the insurer, or the agent or other producer. Requests need not be in writing.
  • A tenant can get an inspection even if the owner is absent.
  • The inspector points out problem features but can't say whether coverage will be granted.
• The report goes to the facility within 5 business days. The facility then issues an action report within 5 business days (379.820, 379.830).
• Allowed standards: physical condition and present use or housekeeping, such as vacancy, overcrowding or rubbish.
• Not allowed: neighborhood, area location, or environmental hazards beyond the owner's control.
• The policy issues within 3 business days, effective at noon on the day premium is received.

Policies

• One-year term.
• Cancellation without committee approval is allowed only for:
  • incendiarism (arson by or for the insured)
  • nonpayment
  • fraud
  • changed conditions that make the risk uninsurable
• Notice is at least 30 days (379.845).
• Appeals go to the Director within 30 days (379.850).
• Commission: 12% on new business and 10% on renewals (379.855).

Common exam traps

• The cancellation law covers owner-occupied dwellings of up to two families. It doesn't cover mobile homes.
• Underwriting period: 60 days. Notice: 30 days, or 10 for nonpayment.
• Filing covered claims isn't a cancellation reason.
• The age or location of the home can't be the reason for a refusal.
• FAIR plan limits: $200,000 habitational and $1 million commercial. Commission: 12% / 10%.