A. In determining
whether or not to accept the risk, the Association shall follow reasonable
underwriting standards which shall include, but not be limited to, the
following:
1. The right to decline or cancel
insurance because of the physical condition of the property, such as its
construction, heating, wiring, evidence of unrepaired damage or general
deterioration (however, the mere fact that a property does not satisfy all
current building code specifications would not, in itself, justify declining
the risk);
2. The right to decline
or cancel insurance because of the present use or housekeeping of the property,
such as abandonment, vacancy, overcrowding, excessive rubbish or improper
storage of flammable materials;
3.
The right to decline or cancel insurance because of other specific
characteristics of ownership, condition, occupancy, or maintenance which are
violative of law or public policy and which result in unreasonable exposure to
loss;
4. The right to decline or
cancel insurance on buildings in which any one of the following exists:
a. Failure to pay real estate taxes on the
property after the taxes have been delinquent for one (1) year or more (real
estate taxes shall not be deemed to be delinquent for this purpose even if they
are due and constitute a lien, so long as a grace period remains under local
law during which such taxes may be paid without penalty);
b. Failure, within the insured's control, to
furnish heat, water, sewer services or public lighting for thirty consecutive
days or more;
c. Failure within a
reasonable time to correct conditions dangerous to life, health or
safety.
5. The right to
decline or cancel insurance on property:
a.
Where, because of physical conditions, there is an outstanding demolition
order, outstanding order to vacate or which has been declared unsafe or
uninhabitable in accordance with law;
b. Where fire damage exists and the owner has
not taken reasonable steps to protect and secure the property;
c. Where, following a fire, permanent repairs
have not commenced within sixty (60) days after satisfactory adjustment of
loss; or
d. Where fire damage
exists and the insured has stated or such time has elapsed as clearly indicates
that the damage will not be repaired.
6. The right to decline or cancel insurance
where the applicant is in arrears in the payment of insurance premiums to a
licensed Producer or insurer for the types of coverage which are offered by the
Association;
7. The right to
decline or cancel insurance on any building where it is vacant or where sixty
five percent (65%) of the building is unoccupied, unless the building is
undergoing rehabilitation. Upon request, the Association must be provided with
a schedule for such rehabilitation;
8. The right to decline or cancel insurance
on any building which has been abandoned or where there has been removal of
fixtures or salvageable material from the building and the owner can give no
reasonable explanation for such removal;
9. The right to decline or cancel insurance
where reliable information is secured indicating that the property will be
burned for the purpose of collecting insurance on the property;
10. The right to decline or cancel insurance
where the applicant, insured, mortgagee, loss payee, or any other person having
a financial interest in the property is convicted or where an unresolved
indictment for the crime of arson or for a crime involving a purpose to defraud
an insurance company exists;
11.
The right to decline or cancel insurance where the property has been subject to
more than two (2) fires, each loss amounting to one percent (1%) of the
insurance in force, in any twelve (12) month period; or more than three (3)
such fires in any twenty four (24) month period, provided that the cause of
such fires is due to conditions which are the responsibility of the owner-named
insured;
12. The right to decline
or cancel insurance in those instances where the Association has information
which indicates that a moral hazard exists.
B. The Association shall not decline or
cancel any risk for reasons of neighborhood or area location or any
environmental hazard beyond the control of the property owner.
C. Reasonable underwriting standards with
respect to any liability insurance policy form or endorsement offered by the
Association and Section II of homeowners insurance shall include the general
standards and, in addition, shall include, but not be limited to, the
following:
1. Hazardous physical conditions
including, but not limited to, unfenced swimming pools;
2. Presence of vicious animals;
3. Excessive loss frequency when the
applicant has failed to take reasonable steps to correct any situation which
has given rise to past losses.
D. The Association shall have the right to
decline or cancel, non-renew or withdraw lead liability coverage of residential
rental property owners who are ineligible for such coverage in accordance with
§20-05-9.10 of this Title, as follows:
1. A residential rental property owner who
fails to remediate lead violations which occur after June 30, 2004 on any
property within ninety (90) days of the issuance of a notice of
violation.
2. A residential rental
property owner who owns only one (1) property and has more than one (1)
unremediated dwelling unit at which a child was poisoned prior to July 1,
2004.
3. A residential rental
property owner who owns two (2) or more properties and has more than two (2)
unremediated dwelling units at which a child was poisoned prior to July 1,
2004.
E. The right on
the part of the Association to apply by endorsement in accordance with the
waiver provisions of the statutory standard fire insurance policy of the State
of Rhode Island a "Modern Materials" provision which would permit repairs with
modern materials, not necessarily those of like kind and quality, provided the
structure's integrity, utility and value are not impaired, and that the
policyholder declines to insure the risk to its replacement cost value or a
percentage thereof as required to qualify for coverage under the special loss
settlement endorsement.
