Homeowner’s Insurance Anti-Concurrent Causation Clause – Prohibited

On June 1, 2013 House Bill 695 will take effect in Maryland. The bill, although the title seems harsh, does not eliminate or prohibit the inclusion of the Anti-Concurrent Causation Clause in the homeowner’s insurance policies. The bill requires that an insurer that issues a policy of homeowner’s insurance to provide notice of the inclusion of the clause to a policy holder each year. The notice must:

1. be clear and specific;
2. describe the Anti-Concurrent Causation Clause;
3. describe the manner in which the Anti-Concurrent Causation Clause may be applied by providing at least one example;
4. inform the insured to read the policy for complete information on the exclusion;
5. state that the insured should communicate with the insurance producer or the insurer for additional information regarding the scope of the exclusion.

This will place an additional responsibility on underwriters at the issuance of new and/or renewal policies. It will provide the insured notice of the existence of the clause and information on how it is applied.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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