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Questions and answers on new HO-B homeowner policyQ: What is the difference in the new modified HO-B policy and the original HO-B policy? A: The new modified homeowner policy allows coverage for mold that ensues from a covered water discharge, leak, or overflow that is sudden and accidental, including those that are hidden or concealed. If a policyholder ignores indications of an obvious water problem, such as wet carpeting, the claim for mold removal could be denied. However, the policy does not cover the cost of remediation, which is defined to include testing, treating, containing, or disposing of mold beyond that which is necessary to repair or replace property that is physically damaged by water. Consumers can buy back coverage for remediation costs in increments of 25 percent, 50 percent and 100 percent. Also, the stacking of claims will not be allowed under the buy-back provision. Q: Will the new homeowner policy offer reduced rates? A: Homeowner rates are increasing nationwide, plus 95 percent of the homeowner market in Texas are non-rate regulated. The new basic homeowner policy should hold down expenses for insurance companies thus allowing insurers to pass along savings to consumers. Q: Bottom line - what are you doing? A: We are going back to the basics. The new homeowner policy will provide for basic repairs. It eliminates high-priced procedures which are driving up costs, such as testing, treating, containing or disposing of mold beyond that necessary to repair or replace property that is physically damaged by water. Q: How does the buy-back work? A: It will be mandatory for insurance companies to offer buy-back coverage. Companies must offer enhanced coverage for mold remediation costs in increments of 25 percent, 50 percent and 100 percent. Homeowners purchasing the buy-back coverage will be subject to underwriting on an individual basis. Q: Can you get out of your current HO-B policy and take advantage of the new policy to possibly save money? A: Yes, you can cancel your current homeowner policy and purchase the new modified policy. However, before you act, know what savings you are going to receive. Insurance companies will not be allowed to sell the new policy until after January 1, 2002. Before canceling any existing coverage, homeowners need to be aware of the restricted market with regard to insurers' underwriting guidelines related to water losses. For more information contact:
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