Senate Bill Report SB 5527

Summary

Senate Bill Report on SB 5527, as of January 7, 2022, for the Senate Committee on Business, Financial Services & Trade, committee activity 1/13/22, sponsors Senators Wellman and Kuderer. The bill is titled an act relating to adding sublimits of coverage to an insurance policy's declaration page, and its brief summary requires all sublimits of coverage to be included on the declarations page of residential insurance policies. The summary of the bill states that the declarations page must list all sublimits, including any endorsements, showing the amount of coverage, the percentage of coverage, or both, and that the entire declarations page must be delivered to the insured at every policy renewal. The effective date is ninety days after adjournment of the session in which the bill is passed.

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                            SENATE BILL REPORT
                                  SB 5527

                                      As of January 7, 2022

Title: An act relating to adding sublimits of coverage to an insurance policy's declaration page.

Brief Description: Adding sublimits of coverage to an insurance policy's declaration page.

Sponsors: Senators Wellman and Kuderer.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 1/13/22.


                                     Brief Summary of Bill
           • Requires all sublimits of coverage to be included on the declarations
             page of residential insurance policies.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: Kellee Gunn (786-7429)

     Background: The Insurance Contract. An insurance policy is a contract between the
     insured and the insurance company and establishes what the company agrees to do in
     exchange for the premium paid by the insured. The contract also describes the insured's
     responsibilities and general terms of coverage. The contract is divided into a declarations
     page and the policy itself.

     The Declarations Page. The declarations page, commonly referred to as a "dec sheet,"
     includes basic details of the insurance contract and typically includes the policy number, the
     effective dates, the address of the insured property, the mortgage holder, the coverages,
     coverage limits, the premium, and any discounts.

     The Insurance Policy and Limits of Coverage. The insurance policy is the entire insurance
     contract, and includes the insuring agreements, definitions, and conditions. For a



     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                             SB 5527
     homeowner's insurance policy, a description of the property coverage and the loss it covers,
     as well as liability coverage, will be provided. There may be an exclusions section of the
     policy, which outlines specific coverages or perils not covered by the policy. Typically
     flood and earthquake coverage are excluded from homeowners and renter's policies unless
     purchased as an endorsement or rider. An endorsement or rider addresses issues or items
     not in the original contract and can be added to a homeowner or renter's policy, life
     insurance policy, or auto insurance policy.

     Insurance policies may also have limits of coverage providing the insured the largest dollar
     amount covered for different types of losses, and sublimits which further limit that
     coverage. For example, a policy may have a dollar limit for personal property, with an
     additional limit within that amount for certain items, such as computers.

     Summary of Bill: The declarations page on residential policies must include a listing of all
     sublimits of coverage within the insurance policy, including any endorsements, and show
     either the amount of coverage, the percentage of coverage, or both, that is being limited
     below the overall policy coverage limits. The entire declarations page must be delivered to
     the insured at every policy renewal.

     Residential policies include homeowners, renters, condominium, mobile home, and
     manufactured home noncommercial insurance policies.

     Appropriation: None.

     Fiscal Note: Requested on January 5, 2022.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.




Senate Bill Report                            -2-                                        SB 5527


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