HB 1291 -- HOMEOWNERS' INSURANCE

SPONSOR:  Pearce

COMMITTEE ACTION:  Voted "do pass by consent" by the Committee on
Financial Services by a vote of 17 to 0.

This bill prohibits a lender of a residential mortgage from
requiring a borrower to purchase homeowners' insurance coverage
in an amount exceeding the replacement value of the home and its
contents.

FISCAL NOTE:  No impact on state funds in FY 2005, FY 2006, and
FY 2007.

PROPONENTS:  Supporters say that the insurance on a home does not
need to include the value of the land, only the replacement value
in case of fire, but secondary lenders routinely require this
higher coverage amount.  The premiums on a home are higher
because of this required over insurance.  In addition, fraud is
always a possibility when the insurance coverage on a property is
artificially high.  That's the reason 23 other states already
have this prohibition.

Testifying for the bill were Representative Pearce; Missouri
Insurance Coalition; Shelter Insurance; and Steve Henderson.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:15 am