SB 1086 -- HOMEOWNER'S INSURANCE

SPONSOR:  Cauthorn (Pearce)

COMMITTEE ACTION:  Voted "do pass by consent" by the Committee on
Financial Services by a vote of 20 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 bill is already law in 23
states.  It is not necessary for insurance on a home to include
the value of the land, only the replacement cost of the structure
in case of fire or tornado, etc.  However, secondary lenders
routinely require this higher coverage amount, making the
insurance premiums more expensive to the homeowner.

Testifying for the bill were Senator Cauthorn; Farmer's Insurance
Corporation; Missouri Insurance Coalition; and Missouri
Association of Realtors.

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 11:16 am