Rhode Island's "other" personal lines questions center on three topics:

• The Rhode Island FAIR Plan (the Rhode Island Joint Reinsurance Association, 230-RICR-20-05-11).
• The lead liability law for rental property (R.I. Gen. Laws 42-128.1-9; 230-RICR-20-05-9).
• Flood and earthquake offers.

Flood (NFIP), umbrella, inland marine and other specialty coverages are in the national guides.

The Rhode Island FAIR Plan

What it is

• The Rhode Island Joint Reinsurance Association is the Rhode Island FAIR Plan. It makes basic property insurance available to applicants shut out of the normal market (11.2).
• Participants: domestic insurers and insurers licensed for the listed property lines. Members share the Plan's writings, expenses, profits and losses in proportion to their Rhode Island property and liability premiums.

What it covers (11.3)

• Basic property insurance, including homeowners coverage on owner-occupied 1-4 family homes.
• Lead liability insurance on residential rental property built before 1978.

Applying

• Apply directly or through a producer the applicant designates.
• Inspections: an inspection for an applicant who didn't request immediate coverage is free.
• Provisional binder: issued automatically if, through no fault of the applicant, coverage is neither offered nor denied within 20 calendar days after the inspection request.

Underwriting standards (11.8)

• The Plan may not decline or cancel because of the neighborhood or area.
• Not meeting every current building code, by itself, isn't a reason to decline.
• The Plan may decline or cancel:
  • A building that is vacant, or 65% unoccupied, unless it is being rehabilitated.
  • Property where permanent repairs haven't started within 60 days after a fire loss is adjusted.
• An unfenced swimming pool is a reasonable liability underwriting concern.
• A deductible on an owner-occupied home may be imposed only after uncorrected excessive loss frequency.

Policy terms

• Policies are written for 1 year.
• Return premium on cancellation is pro rata.
• Except for listed reasons such as nonpayment, cancellation or nonrenewal takes 30 days' notice.

Appeals

• First to the Plan's Governing Committee within 15 days.
• Then to the Commissioner within 30 days.
• Declined applicants get written reasons and notice of their appeal rights.

Producers

• Insurers may not penalize producers for submitting risks to the Plan.
• When a Plan policy is canceled, the producer returns commission on the unearned premium.

Link to private insurers

• A private insurer's cancellation or nonrenewal notice, for reasons other than nonpayment or substitute coverage, must mention possible FAIR Plan eligibility (11.12(B)).

Lead liability on rental property

Coverage requirements

• Since November 1, 2005, liability insurers on Rhode Island rental property generally may not exclude lead poisoning except as the lead law allows (42-128.1-9).
• For a compliant pre-1978 rental with a valid certificate of lead compliance, the policy must include lead liability coverage equal to the bodily injury liability limits.

Non-compliant properties

• An insurer that declines lead coverage must help the owner place it through the FAIR Plan.
• The notice about the exclusion must be in at least 16-point type.
• An owner who gets a notice of lead violation becomes ineligible for lead coverage, and subject to cancellation, unless the property is brought into compliance within 90 days.

Scope and rates

• The regulation doesn't apply to excess or umbrella coverage.
• Lead liability rates must be filed and approved.

Flood and earthquake

• Flood: standard homeowners policies exclude flood. Coverage comes from the NFIP or a private flood insurer. Rhode Island requires a flood notice at issuance and each renewal of policies with fire coverage (27-5-3.6).
• Earthquake: insurers must offer earthquake coverage on owner-occupied 1-4 unit homes, tenants and condo policies (27-5-3.5).
• Private flood placed in surplus lines doesn't require the usual three-declination affidavit (27-3-38(c)).

Common exam traps

• Joint Reinsurance Association = FAIR Plan.
• FAIR Plan appeals: to the Governing Committee within 15 days, then to the Commissioner within 30 days.
• Provisional binder after 20 days without a decision.
• No declines based on neighborhood. Vacancy or 65% unoccupancy can justify one.
• Lead: compliant pre-1978 rentals get lead coverage equal to the BI limits. A violation must be fixed within 90 days.