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HB 1148

Residential Condominium Unit Insurance - Lapses in Coverage - Prohibition on Denial

2025 Regular Session Introduced by Terry Baker and 3 co-sponsors

Maryland law now prohibits insurers from denying condominium homeowners insurance solely because of prior coverage lapses, protecting owners from permanent policy denial.

Approved by the Governor - Chapter 381
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WeVote Research Nonpartisan
Bill Summary · HB 1148

Legislative bill overview

HB 1148 prohibits insurance companies from denying coverage or canceling homeowners insurance policies for condominium units based solely on lapses in coverage. The bill establishes protections for condo owners who experience gaps in their insurance, requiring insurers to reinstate or issue new policies without penalty related to those lapses.

Why is this important

Condominium owners face unique vulnerabilities because their insurance is often intertwined with building-wide policies managed by homeowners associations. A coverage lapse—whether due to administrative delays, billing errors, or transition issues—could previously result in permanent policy denial or cancellation, leaving owners uninsured and potentially unable to sell or refinance their units. This bill provides consumer protection by preventing insurers from using temporary lapses as grounds for blanket denials.

Potential points of contention

  • Insurer concerns: Insurance companies argue that coverage lapses indicate higher risk and justify higher premiums or stricter underwriting; this bill may limit their ability to assess risk accurately or decline clearly problematic applicants.
  • Definition ambiguity: The bill may not clearly define what constitutes a permissible vs. impermissible "lapse," potentially creating disputes about whether 30 days, 6 months, or longer gaps trigger different rules.
  • Moral hazard: Critics worry the prohibition could incentivize owners to let coverage lapse intentionally, knowing they cannot be permanently denied, increasing insurer losses and potentially raising premiums for all policyholders.

Compiled from official sources — confirm details with the bill’s official record.

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