House Bill 1687

AN ACT TO PROVIDE THAT BEFORE ISSUING A PERSONAL LINES RESIDENTIAL PROPERTY INSURANCE POLICY, THE INSURER SHALL OFFER A POLICY THAT PROVIDES A COVERAGE LIMIT ON THE DWELLING EQUAL TO THE UNPAID PRINCIPAL BALANCE OF ALL DEEDS OF TRUST ON THE COLLATERAL; TO EXCLUDE CONDOMINIUMS FROM THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) Before issuing a personal lines residential property insurance policy, the insurer shall offer a policy that provides a coverage limit on the dwelling equal to the unpaid principal balance of all deeds of trust on the collateral. Before issuing any policy that limits coverage on the dwelling equal to the unpaid principal balance of all deeds of trust on the collateral, the insurer shall obtain a statement signed by all insureds which contains the following notice in boldfaced type no smaller than eighteen (18) point: "YOU ARE ELECTING TO PURCHASE COVERAGE AT A LIMIT THAT IS EQUAL TO ONLY THE UNPAID PRINCIPAL BALANCE OF THE DEED OF TRUST ON YOUR HOME. ACCORDINGLY, IN THE EVENT OF THE TOTAL LOSS OF YOUR HOME OR A LOSS FOR WHICH THE COST TO REPAIR YOUR HOME EXCEEDS THE UNPAID BALANCE ON YOUR DEED OF TRUST, YOU WILL INCUR SIGNIFICANT FINANCIAL LOSSES, INCLUDING THE POTENTIAL LOSS OF SOME OF YOUR HOME'S EQUITY."

(2) Each time an insured's policy is being renewed, under this unpaid principal option, the insured shall provide the insurer with an unpaid principal balance that has been verified by the lender and the insurer shall offer a policy that provides a coverage limit equal to that unpaid principal, in addition to any other policies the insurer offers.

(3) The provisions of this section shall only apply to single-family residences and investment property. This section shall not apply to condominiums.

SECTION 2. This act shall take effect and be in force from and after July 1, 2024.