Iowa Bulletin 24-03

On July 22, 2024, Iowa Governor Kim Reynolds issued Proclamation of Disaster Emergency No. 2024-37, extending three previously issued proclamations related to the severe storms occurring in Iowa from June 21 to June 24, 2024, covering several counties across Iowa. The extension of these proclamations subsequently extends the relief prescribed in Iowa Insurance Bulletin 24-03 to the covered counties until Proclamation No. 2024-37 expires on August 21, 2024: Buena Vista, Cerro Gordo, Cherokee, Dickinson, Humboldt, Emmet, Floyd, Fremont, Hancock, Harrison, Hossuth, Kossuth, Lyon, Mills, Monona, O'Brien, Osceola, Palo Alto, Plymouth, Pocahontas, Pottawattamie, Sioux, Webster, Winnebago, Woodbury, Worth, Wright.

See the full Bulletins on the Iowa Insurance Division website.

Cancellation Grace Period Due to Nonpayment or Late Payment
- The Commissioner requests all insurers licensed in this state allow coverage to remain in effect for any Iowa insured who resides in a county where a state disaster proclamation is in place and who has had their ability to timely act or respond to an insurer materially affected.
  - Insurers may alternatively choose to implement this request in a broader manner such as delineating impacted areas by zip code, county or other geographic territory to assist impacted insureds in areas where a state disaster proclamation is in place.
- Insurers should also consider providing a grace period during which their insureds can take actions necessary to keep their policies in force.
  - The Iowa Insurance Division is not requesting insurers waive any premiums, deductibles, cost-sharing or other consideration owed on any policy or contract during this period of time. The Iowa Insurance Division anticipates that a failure to pay premiums, deductibles, cost-sharing or remit consideration within a reasonable time after the expiration of such disaster designation may subject the policy to a retroactive cancellation, in accordance with the policy terms.
- For those policies with an automatic bank draft or electronic funds transfer arrangement, insurers may continue payment deductions unless or until the policyholder terminates this arrangement with the insurer and the financial institution.
Reporting Requirements for Claims
- Consumers in an area where a state disaster declaration is in place who have been temporarily or permanently displaced during a natural disaster may have lost access to records and documents that would assist them in filing claims, including claims for destroyed or damaged property. Insurers should consider extending reporting timeframes or permitting requests for additional time to file claims.
Claim resolution
- Given the varied circumstances leading to delays that may occur around the recovery efforts, invoking contractual provisions prohibiting payment of recoverable depreciation after a certain deadline may be viewed as a failure to act in good faith to effectuate fair and equitable settlement of a claim pursuant to Iowa Code sections 507B.3 and 507B.4.
- In an area where a state disaster proclamation is in place, consumers with open claims hold up their end of the insurance contract by diligently working towards the completion of repairs. Diligent work toward completion is proper justification for granting an extension request.
- Delays in the claim handling may limit a policyholder's ability to later file an action against the carrier for disputed claims. Carriers must use great care in applying these provisions as policyholders request extensions in claims handling.
- Carriers must evaluate issues related to supply chain interruption and contractor availability and apply reasonable claim handling responses when these factors complicate the claim resolution.
Letter of Declination for FEMA
- Producers should assist their insureds that do not have flood insurance and that are in a flood damaged area by writing a letter of declination on letterhead that states the insured does not have flood insurance and attaching a copy of the insurance policy declarations page and the insurance policy to the letter. This should be adequate to allow the Federal Emergency Management Agency (FEMA) to determine there is no coverage and allow the FEMA process to move along more quickly. While FEMA needs to know there is not insurance coverage available, it is generally not in the best interest of the consumer to file a baseless claim.