Property Insurance - Settlement of Claims and Notices
HB 283 would change Maryland property insurance law in two main ways. First, it establishes a statutory method for calculating actual cash value in first-party residential and commercial property claims when damaged property must be repaired, rebuilt, or replaced. Under the bill, the actual cash value recovery would be the lesser of the cost to repair, rebuild, or replace the property minus a reasonable deduction for physical depreciation, or the policy limit. The bill also specifies that labor costs are not subject to depreciation, except for labor costs that are intrinsically included in the cost of manufactured materials or goods.
Second, the bill requires insurers that issue or renew homeowner’s or renter’s insurance policies to provide advance written notice, at least 45 days before renewal, of any differences between the expiring and renewal policies. The notice must identify changes in coverage limits, risks no longer covered, reductions or limitations in coverage, and deductible changes. The notice must be clear and specific, may be delivered electronically, and is not required if the renewal policy is identical to the expiring policy. The bill applies to policies issued or renewed on or after October 1, 2026.
HB 283 would add new Insurance Article provisions governing property insurance claim settlement and renewal disclosures, and it would amend Maryland’s unfair claim settlement practice statutes to make noncompliance with the new actual cash value rule a violation of the insurance code. In practical terms, the bill would affect insurers handling first-party residential and commercial property losses, as well as homeowners and renters receiving renewal notices. It would also create a clearer statutory standard for depreciation calculations in property claims and impose a new consumer-notice obligation on insurers renewing personal lines property policies.
The available context suggests the bill is a departmental request from the Maryland Insurance Administration and was assigned to the House Judiciary Committee, which generally indicates administrative support for clarifying insurance practices. No committee transcript or recorded vote is provided, so there is no evidence of formal opposition or amendment debate in the materials supplied. Overall, the bill appears to be framed as a consumer-protection and claims-clarification measure rather than a controversial policy shift.
The most likely points of contention are the treatment of labor in actual cash value calculations and the scope of the renewal-notice requirement. Insurers may view the prohibition on depreciating labor as increasing claim payouts, while policyholders and consumer advocates may see it as preventing underpayment. Another possible issue is the burden of providing detailed advance renewal notices, though the bill limits that duty by exempting identical renewals and allowing electronic delivery. No specific objections are documented in the provided record.