Monday, March 7, 2011

Senate votes on homeowner’s insurance bill

Homeowners who file two insurance claims or less within five years will not have their household policies canceled under a measure approved by the Senate Friday. Its sponsor, Sen. Joyce Foster, D- Denver, says her bill is about protecting consumers.

‘This is not an insurance bill, this is a homeowners bill,” said Foster.

Senate Bill 15 would prohibit insurance companies from canceling policies of customers who file two claims or less during a five-year period. It also would place limits on other changes to a policy if the homeowner meets the same standard of two or fewer claims in five years.

Foster said the restrictions are necessary because too many people who pay on a policy for years are left high and dry after they file a claim. They can face non-renewals or drastic increases in premiums. Homeowners are left to wonder whether or not their policies will go away if they make a claim.

“All this does is provide predictability for homeowners,” said Foster. “This bill says you can’t be canceled willy-nilly. It’s a common sense consumer bill.”

Republicans countered that the restrictions on insurance companies would put a damper on their ability to offer policies at affordable rates. Sen. Bill Cadman, R-Colorado Springs said the insurance market is already highly regulated, and it boils down to the industry’s bottom line—risk.

“Insurance companies cannot take on a higher risk than they can afford to pay for,” said Cadman. “It’s important that we allow them to do their business. They don’t just raise their rates because they decide they don’t like you. It’s very scientific. We need a competitive marketplace. ”

Republican Senate Minority Leader Mike Kopp, of Littleton, said consumers will lose if the insurance industry’s hands are tied.

“We sometimes get too clever by half and think that we can soak the big evil insurance company when in reality those costs are going to be passed down to the consumer,” said Kopp. “The more we meddle with these marketplaces, the higher the costs are going to go up for consumers.

The measure is now scheduled for a final, roll-call vote in the Senate today before it can head over to the House for consideration.

Via – Colorado News Agency

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