TO AMEND PROPERTY AND CASUALTY LAW; AND TO REQUIRE REASONABLE PROOF OF PAYMENT OF A DEDUCTIBLE TO RECOUP RECOVERABLE DEPRECIATION UNDER PROPERTY AND CASUALTY LAW.

2025 Regular Session Introduced by Blake Johnson and 1 co-sponsor

HB 1811 requires property insurance policyholders to prove deductible payment before recouping depreciation, aiming to reduce fraud and clarify claims processes.

Recommended for study in the Interim by the Committee on INSURANCE & COMMERCE- HOUSE

Summary of House Bill 1811 (HB 1811)

Bill Title: To Amend Property and Casualty Law; and to Require Reasonable Proof of Payment of a Deductible to Recoup Recoverable Depreciation Under Property and Casualty Law

Bill Number: HB 1811
Introduced On: March 17, 2025
Status: Recommended for study in the Interim by the Committee on Insurance & Commerce - House
Primary Sponsors: Representative Steimel and Senator B. Johnson

Purpose and Intent

House Bill 1811 aims to amend existing property and casualty insurance laws in Arkansas. The primary intent of the bill is to establish requirements for policyholders regarding the payment of deductibles before they can recoup recoverable depreciation on claims made under property insurance policies. This legislation seeks to clarify the definitions and processes related to deductibles and recoverable depreciation, thereby enhancing the integrity of insurance claims.

Key Provisions

Definitions: The bill introduces specific definitions related to property insurance, including:

Fraudulent Insurance Act: Defined as per existing law.
Person: Includes individuals and various legal entities.
Property Insurance Policy: Refers to policies providing first-party coverage for real property.
Reasonable Proof of Payment: Specifies acceptable forms of proof, including:
- Canceled checks
- Money order receipts
- Credit card statements
- Executed installment plans
- Other financing arrangements for deductible payments

Deductible Payment Requirement:

Insured individuals must pay any applicable deductible for first-party claims.
Failure to pay the deductible is classified as a fraudulent insurance act.

Waiving Deductibles:

Any person who waives a deductible or provides a rebate in lieu of a deductible is also committing a fraudulent insurance act.

Insurer's Rights:

Property and casualty insurers may withhold payment for recoverable depreciation until they receive reasonable proof of deductible payment from the policyholder.

Enforcement:

Violations of this section may result in penalties under the Trade Practices Act.

Impact

Policyholders: Individuals with property insurance policies will need to ensure they provide proof of deductible payment to access recoverable depreciation.

Insurance Companies: Insurers will have clearer guidelines on handling claims related to deductibles and recoverable depreciation, potentially reducing fraudulent claims.

Legal Framework: The bill reinforces the legal consequences for fraudulent acts related to insurance claims, aiming to protect the integrity of the insurance system.

Procedural Aspects

The bill was filed and read for the first time on March 17, 2025, with subsequent actions leading to its withdrawal by the author on April 14, 2025. It has been recommended for study in the interim by the Committee on Insurance & Commerce.

This summary provides an overview of HB 1811, highlighting its purpose, key provisions, and potential impacts on policyholders and insurers in Arkansas.