Rhode Island's homeowners questions focus on coastal and claims protections, mostly in chapter 27-76 and the weather-related loss regulation 230-RICR-20-05-13:

• Hurricane deductibles (5% maximum).
• Protection for small and catastrophe claims.
• Mitigation incentives.
• Required flood and earthquake offers.
• The material change notice at renewal.
• Unfair discrimination limits.

The HO forms and coverages are in the national Homeowners guide. Standard fire policy numbers are in the Rhode Island property and casualty basics guide, and the FAIR Plan is in the Other Personal Lines guide.

Hurricane and windstorm deductibles (27-76-2; 230-RICR-20-05-13)

Limits on the deductible

• A residential property policy's hurricane deductible may not exceed 5% of the dwelling's insured value. Example: Coverage A of $400,000 means a $20,000 hurricane deductible.
• If a flat dollar deductible is offered as well, the total still can't exceed 5%.
• A separate windstorm deductible for wind events that aren't hurricanes is not allowed.

When it applies

• Only during a period ending 24 hours after the last hurricane warning for any part of the state ends.
• Block Island: a loss is "due to a hurricane" when hurricane-force sustained winds are reported on Block Island.
• Once a year: the deductible applies once per calendar year for that year's hurricane losses (27-76-3).
• Notice: the insurer's notice must illustrate the deductible with at least two examples.

Mitigation

• If the insured installs approved windstorm mitigation and the insurer inspects it or gets proof, the hurricane deductible can't apply to that insured.
• After completing mitigation the insurer requested, the insured can't be nonrenewed because of the insurer's catastrophe exposure (27-76-2(e)).
• An insurer that plans to nonrenew for failure to do requested mitigation files a plan with the Department 90 days in advance.

Scope

• These rules don't apply to approved surplus lines insurers.

Claims that can't be held against the insured

• Small claims: no cancellation, nonrenewal or premium increase solely because of a claim that paid less than $500. This protection ends if the insured has two or more paid non-catastrophe claims in 3 years (27-76-4).
• Catastrophe claims: a claim from a catastrophic storm can't, by itself, lead to cancellation, nonrenewal or a surcharge (27-76-8).
• Prior owners: a buyer can't be declined solely because of a prior owner's claim, unless the risk that caused it wasn't mitigated (27-76-7).
• Mediation: when the Department announces it by bulletin, a hurricane claim mediation program is available. It is nonbinding and at the insured's election (27-76-5).

Renewal with reduced coverage (230-RICR-20-05-14)

Scope

• Applies to personal auto, homeowners and residential fire renewals.

What counts as a material change

• Any coverage reduction, elimination or higher deductible the insured didn't request.

The notice

• It must carry the heading "NOTICE OF REDUCTION IN COVERAGE."
• It is required even when the insured asked to add a hurricane deductible.
• Without proper notice, the prior coverage continues until notice is given or replacement coverage takes effect.

Required offers and notices

• Flood notice: at issuance and at each renewal, insurers writing standard fire coverage must tell the insured that the policy may not cover flood, that NFIP coverage may be available, and to ask the insurer or producer for help (27-5-3.6).
• Earthquake: insurers writing homeowners, tenants or condo coverage on owner-occupied 1-4 unit homes must make earthquake coverage available (27-5-3.5).
• Vacancy and vandalism: a residential policy may exclude vandalism and malicious mischief only if the dwelling was vacant for more than 60 consecutive days before the loss (27-5-3.9).

Binders at closings (27-5-6)

• A temporary fire binder may be oral or written, for up to 30 days.
• At a real estate closing, a lender must accept a producer's written binder that names the lender as loss payee and promises certified or registered mail notice of cancellation.
• The lender may require the policy within 30 days after closing.

Unfair discrimination

The following are prohibited (27-29-4(7)):

• Refusing coverage on an owner-occupied home solely because of its area. The fine is $500 per violation (27-29-4.1-4.2).
• Nonrenewing solely because of the home's age, unless there is a non-pretextual business reason.
• Treating someone differently because of sex, marital status or physical impairment.

Domestic abuse (27-60.1-5)

• Canceling or surcharging because the insured is a victim of domestic abuse is prohibited.
• A claim caused by an abuser who isn't an insured can't be denied for that reason.

Common exam traps

• Hurricane deductible: no more than 5% of the dwelling value. It applies until 24 hours after the last warning ends, once per calendar year, and there is no separate non-hurricane wind deductible.
• Claims under $500 and catastrophe claims can't, on their own, trigger nonrenewal.
• Material change notice heading: "NOTICE OF REDUCTION IN COVERAGE." Without it, the old coverage continues.
• Earthquake must be offered. A flood notice is required at issue and at every renewal.