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S2011AInsurance

Insurance-Casualty Insurance Generally-Limitations on Policy Cancellations and Renewals

This bill requires insurance companies to give clearer, advance written notice when reducing coverage, increasing deductibles, or canceling policies.

Introduced69 Yea0 Nay6 Not voting
Population
Affected
72
Email Legislator
Introduced Jan 9, 2026Committee Senate Commerce

Plain-English Summary

This bill changes the rules for insurance companies when they renew or cancel certain insurance policies, like auto and homeowners insurance. It requires insurance companies to give customers a 60-day written notice if they decide not to renew a policy. If the insurance company reduces coverage, eliminates coverage, or increases deductibles without the customer asking for it, they must provide a 30-day written notice. The notice must clearly list the changes and be prominently labeled "NOTICE OF REDUCTION IN COVERAGE." The bill also sets specific rules for how this notice must be sent to the customer, whether by mail or email.

For younger readers

When grown-ups buy insurance for their cars or houses, the insurance company promises to help pay if something bad happens. This bill makes a new rule for those insurance companies. If the company decides they don't want to protect the car or house anymore, they have to tell the grown-up 60 days before it stops. If the company wants to cover less or make the grown-up pay more if something goes wrong, they have to tell them 30 days ahead of time. They have to use clear letters or emails so the grown-up knows exactly what is changing.

Who & Where It Applies

Impacted groups
PolicyholdersInsurance companiesInsurance agentsCommissioner of insurance
Impacted communities
All

Constitutional & Fiscal Check

None Likely. The bill regulates commercial speech and sets consumer protection standards for insurance contracts, which falls within the state's well-established regulatory authority over the insurance industry.

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Increases consumer protection by ensuring policyholders receive adequate advance warning before their insurance coverage is reduced or dropped, preventing sudden gaps in coverage.
  • Enhances transparency by requiring insurance companies to clearly label and explain any reductions in coverage or increased costs, which helps low-income individuals better manage their finances.
  • Mandates accessible communication methods, including specific requirements for print and email notices, ensuring that all consumers, regardless of their preferred communication method, are properly informed.
  • The 30-day notice period for coverage reductions or increased deductibles may still be too short for financially vulnerable individuals to find alternative, affordable insurance.
  • Protects insurance companies and the commissioner from lawsuits regarding the reasons for cancellation or nonrenewal, which could limit accountability if an insurer acts discriminatorily.
  • Does not address or restrict the underlying reasons why insurance companies can cancel, non-renew, or reduce coverage, leaving marginalized communities potentially vulnerable to predatory industry practices.
For Conservatives
  • Provides clear, standardized guidelines for insurance companies to follow when notifying customers of policy changes, reducing regulatory ambiguity.
  • Explicitly protects insurance companies, their agents, and the commissioner from liability or lawsuits arising from the communication of reasons for cancellation or nonrenewal.
  • Allows insurance companies to continue making business decisions regarding coverage reductions, deductibles, and nonrenewals, preserving corporate freedom to manage risk.
  • Imposes new regulatory burdens and specific formatting mandates on insurance companies regarding how they must communicate with their customers.
  • Dictates specific timelines that restrict an insurance company's flexibility to quickly adapt to market changes or reassess risky policyholders.
  • Requires state insurance division approval for certain coverage changes, increasing government interference in private business contracts.

Votes

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Full Bill Text

2 versions
Changes to existing Rhode Island law · 10 additions · 1 deletion

SECTION 1. Section 27-8-11 of the General Laws in Chapter 27-8 entitled "Casualty Insurance Generally" is hereby amended to read as follows: 27-8-11. Regulations on cancellation and renewal.

(a) In addition to, and not in lieu of, any other power the commissioner has to issue rules and regulations, the commissioner of insurance may promulgate, in accordance with the procedure established in chapter 35 of title 42, reasonable rules and regulations concerning cancellation and renewal of liability and property damage insurance for automobiles rated as private passenger automobiles, homeowners insurance, residential fire insurance, or any components thereof. Those regulations may require that the insurer shall furnish to the named insured the reason, or reasons, for cancellation or nonrenewal. Those For liability and property damage insurance for automobiles rated as private passenger automobiles, those regulations shall also require that the insurer furnish, at least thirty (30) days prior to renewal, written notice of any coverage reductions, elimination, or increased deductibles not made at the request of the insured. For homeowners insurance, residential fire insurance, or any components thereof, those regulations shall require that the insurer furnish, at least thirty (30) days prior to renewal, written notice of any coverage reduction or elimination, cancellation, or increased deductibles not made at the request of the insured. For homeowners insurance, residential fire insurance, or any components thereof, as of July 1, 2027, those regulations shall also require that the insurer furnish written notice of nonrenewal at least sixty (60) days prior to renewal The notice shall itemize and describe the policy coverage reductions, elimination, or increased deductibles and shall be captioned “NOTICE OF REDUCTION IN COVERAGE”. The policyholder shall be notified that the policy renewal contains the “NOTICE OF REDUCTION IN COVERAGE” by one of the following manners:

(1) By mailing the “NOTICE OF REDUCTION IN COVERAGE” separate from the renewal policy package mailing; or

(2) By printing “NOTICE OF REDUCTION IN COVERAGE ENCLOSED” on the renewal policy package envelope and including said reductions in the first few pages of the renewal policy package; or

(3) By printing “NOTICE OF REDUCTION IN COVERAGE ENCLOSED” on the first page of the renewal policy package; or

(4) If the renewal policy package is made available by email, the email notifying the policyholder of the renewal shall contain a statement that the policy contains a “NOTICE OF REDUCTION IN COVERAGE” and said reductions shall be in the first few pages of the renewal policy package. These coverage changes must be approved by the insurance division with respect to those types of insurance defined in § 27-8-1(1) — (8), issued to non-business insureds and bodily injury and property damage liability coverage issued to non-business insureds. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner of insurance or any insurer, their authorized representatives, agents, or employees, or any firm, person, or corporation furnishing to the insurer or commissioner information as to the reasons for cancellation or nonrenewal; for any statement made by any of them in any written notice of cancellation or nonrenewal; or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal; or for the providing of information pertaining to the cancellation or nonrenewal; or for statements made, or evidence submitted, at any hearing conducted in connection with the cancellation or nonrenewal.

(b) The commissioner shall promulgate regulations with respect to personal motor vehicle insurance, homeowners insurance, and residential fire insurance, or any components of that insurance requiring notification to policyholders upon renewal of any coverage reductions, elimination, or increased deductibles not at the request of the insured.

SECTION 2. This act shall take effect upon passage.