Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 05 - Personal Lines - Automobile and Homeowners Insurance › Part 11 - Basic Property Insurance Inspection and Placement Program (230-RICR-20-05-11) › Section 230-RICR-20-05-11.8 - Reasonable Underwriting Standards

Current through June 14, 2024
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.