Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-1510, Arizona Revised Statutes, is amended to read:
20-1510. Homeowner's or renter's insurance; disclosure; aerial or satellite imagery; coverage reduction; premium increase; notice; dog breeds; prohibitions; definitions
A. It is the policy of this state that each consumer be afforded at least the minimum protections prescribed in this section in connection with the purchase, coverage and claims process of any policy of insurance that is offered, solicited or sold in this state.
B. Before an insurer may issue or sell a policy of insurance, the insurer shall disclose to the applicant, or if the policy of insurance is a renewal, on request of the insured, all of the following:
1. All perils for which a loss is excluded from coverage, including whether the policy covers loss due to flooding, earthquake or mold.
2. All factors that were used by the insurer to determine the premium, including at a minimum, if applicable:
(a) The location of the property.
(b) The features of the property.
(c) Any risk scores that are associated with the property whether produced from a model or otherwise.
(d) Images of the property, including any aerial or satellite imagery.
(e) Any major risks that the insurer identified on the property.
3. Any premium incentives or discounts that are offered by the insurer for property improvements that reduce the risk of loss to the property from natural disasters, including wildfires, floods, mudslides, hail and high winds, and the impact any such improvements have on the total premium.
C. If an insurer uses aerial or satellite imagery to underwrite or determine the premium for a policy of insurance, the insurer shall provide to the applicant, or if the policy is a renewal, the insured on request, all images used by the insurer. An insurer may not use any aerial or satellite image that is older than one hundred eighty days for any underwriting or rating purposes on a policy of insurance.
D. Before implementing any reduction in coverage or imposing a premium increase greater than ten percent for a policy of insurance, the insurer shall provide at least sixty days' written notice to the insured and include an explanation for the reduction in coverage or premium increase.
A. E. The breed of a dog may not be the sole factor considered or used for any of the following purposes:
1. Underwriting or actuarial processes for determining risk, liability or actual or potential losses related to claims involving dogs under a policy of insurance.
2. Questionnaires, surveys or other means of gathering information regarding ownership or possession of a dog or the presence of a dog on premises insured or to be insured under a policy of insurance.
B. F. For the purposes of this section:
1. "Breed" means the actual or perceived breed or mixture of breeds of a dog.
2. "Policy of insurance" means a homeowner's or renter's policy of insurance.
Sec. 2. Title 20, chapter 6, article 7, Arizona Revised Statutes, is amended by adding section 20-1511, to read:
20-1511. State of emergency; homeowner's or renter's insurance; cancellation or nonrenewal prohibition; total and severe loss claims; definition
A. If the governor declares a state of emergency as prescribed in section 26-303 after a natural disaster or wildfire, an insurer may not do either of the following:
1. For the next twelve months refuse to renew a policy of insurance with an insured that resides or that is located within the area designated in the state of emergency.
2. For the next sixty days cancel a policy of insurance for nonpayment of a premium.
B. A policy of insurance may not require an insured to provide to the insurer an itemized list of lost assets before the insured is provided additional living expense coverage, if covered by the policy, for total loss claims or for claims for which the loss renders the property uninhabitable for a period of time.
C. For the purposes of this section, "Policy of insurance" has the same meaning prescribed in section 20-1510.
Sec. 3. Section 20-1652, Arizona Revised Statutes, is amended to read:
20-1652. Grounds for valid notice of cancellation; inquiries; definitions
A. After a policy has been in effect for sixty days or, if the policy is a renewal, effective immediately, a notice of cancellation is not effective unless it is based on the occurrence, after the effective date of the policy, of one or more of the following:
1. Nonpayment of premium, except as prescribed in section 20-1511.
2. Conviction of the named insured of a crime arising out of acts increasing the hazard insured against.
3. Acts or omissions by the insured or the insured's representative constituting fraud or material misrepresentation in obtaining the policy, continuing the policy or presenting a claim under the policy.
4. Discovery of grossly negligent acts or omissions by the insured substantially increasing any of the hazards insured against.
5. Substantial change in the risk assumed by the insurer, since the policy was issued, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract.
6. A determination by the director that the continuation of the policy would place the insurer in violation of the insurance laws of this state.
7. Failure of the insured to take reasonable steps to eliminate or reduce any conditions in or on the insured premises that contributed to a loss in the past or will increase the probability of future losses.
B. If nonrenewal is based on the condition of the premises, the insured shall be given thirty days' notice to remedy the identified conditions. If the identified conditions are remedied, coverage shall be renewed. If the identified conditions are not satisfactorily remedied, the insured shall be given an additional thirty sixty days, on payment of premium, to cure the defective condition. Any insured who believes nonrenewal under this subsection is arbitrary or capricious may use the appeal procedures set forth in section 20-1633.
C. If an insurer uses for underwriting purposes information from a report provided by, or database maintained by, an insurance support organization or consumer reporting agency related to the premises that is the subject of the application or to the person applying for insurance, the insurer shall obtain that information as soon as practicable on application by a person for insurance coverage and before the issuance of a binder of insurance coverage. Failure of the insurer to timely obtain the information required by this subsection precludes the insurer from declining insurance coverage or terminating a binder of insurance coverage based on the information. This subsection does not apply to a policy renewal.
D. This section does not affect the provisions of section 20-1120.
E. After thirty days from the application by an insured for insurance coverage, no declination of insurance coverage or termination of a binder shall be based on information from a consumer report, including a consumer report provided by, or database maintained by, an insurance support organization or consumer reporting agency related to the premises that is the subject of the application or to the person applying for insurance. Notwithstanding any other law, an insurer may decline or terminate insurance coverage based on the condition of the premises as determined through a physical inspection of the premises.
F. An insurer shall not consider as a claim any inquiry by an insured into whether a policy will cover a loss or about the type or level of coverage. An insurer shall not use such an inquiry, regardless of the source of the information that an inquiry was made, as a basis for declining, nonrenewing or canceling insurance coverage or a binder of insurance coverage. An insurer shall not submit to any insurance support organization or consumer reporting agency that a mere inquiry was made to the insurer as to the terms or coverage of a policy of insurance. An inquiry into coverage on a property insurance policy is not a claim activity unless an actual claim is filed by the insured that results in an investigation of the claim by the insurer.
G. For the purposes of this section, nonrenewal does not include the issuance and delivery of a new policy within the same insurer or an insurer under the same ownership or management as the original insurer as provided in this subsection. An insurer may transfer any of its policies to an affiliated insurer. An insurer may not transfer a policyholder because of the policyholder's location of residence, age, race, color, religion, sex, national origin or ancestry. A transfer by an insurer pursuant to this subsection does not allow the insurer to apply a new unrestricted sixty-day period for cancellation or nonrenewal.
H. For the purposes of this section:
1. "Consumer reporting agency" has the same meaning prescribed in section 20-2102.
2. "Insurance support organization" has the same meaning prescribed in section 20-2102.
Sec. 4. Section 20-1654, Arizona Revised Statutes, is amended to read:
20-1654. Sending notice of intention not to renew to insured; time; term
of policy
A. Unless the insurer, at least thirty sixty days before the end of the policy period, sends to the named insured notice of its intention not to renew the policy or to condition its renewal on reduction of limits or elimination of coverages, the insurer shall not fail to renew the policy on payment of the premium due on the effective date of the renewal, in accordance with the then existing rating manual of the insurer.
B. For the purposes of this section:
1. Any policy written for a term of less than one year may be renewed for a term of one year if the notice is not given as required by subsection A of this section. For the purposes of subsection A of this section, a policy with no fixed expiration date is deemed written for successive policy periods of one year.
2. Nonrenewal does not include the issuance and delivery of a new policy within the same insurer or an insurer under the same ownership or management as the original insurer as provided in this paragraph. An insurer may transfer any of its policies to an affiliated insurer. An insurer may not transfer a policyholder because of the policyholder's location of residence, age, race, color, religion, sex, national origin or ancestry. A transfer by an insurer pursuant to this paragraph does not allow the insurer to apply a new unrestricted sixty-day period for cancellation or nonrenewal.
C. This section does not apply if the insured has accepted replacement coverage or has agreed to nonrenewal.
Sec. 5. Section 20-2110, Arizona Revised Statutes, is amended to read:
20-2110. Reasons for adverse underwriting decisions
A. In the event of an adverse underwriting decision the insurance institution or insurance producer responsible for the decision shall either provide the applicant, policyholder or individual proposed for coverage with the specific reason for the adverse underwriting decision in writing or advise the person, in writing, that on written request the person may receive the specific reason in writing and provide the applicant, policyholder or individual proposed for coverage with a summary of the rights established under subsection B of this section and sections 20-2108 and 20-2109.
B. On receipt of a written request within ninety business days after the date the notice or other communication of an adverse underwriting decision is sent to an applicant, policyholder or individual proposed for coverage, the insurance institution or insurance producer shall send to the person within twenty-one business days after the date of receipt of the written request:
1. The specific reason for the adverse underwriting decision, in writing, if the information was not initially furnished in writing pursuant to subsection A of this section.
2. The specific items of personal and privileged information that support those reasons except that:
(a) The insurance institution or insurance producer is not required to furnish specific items of privileged information if it has a reasonable suspicion, based on specific information available for review by the director, that the applicant, policyholder or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation or material nondisclosure.
(b) Specific items of medical record information supplied by a medical care institution or medical professional shall be disclosed either directly to the individual about whom the information relates or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, at the option of the insurance institution or insurance producer.
3. The names and addresses of the institutional sources that supplied the specific items of information pursuant to paragraph 2 of this subsection, except that the identity of any medical professional or medical care institution shall be disclosed either directly to the individual or to the designated medical professional, whichever the insurance institution or insurance producer prefers.
C. The obligations imposed by this section on an insurance institution or insurance producer may be satisfied by another insurance institution or insurance producer authorized to act on its behalf.
D. If an adverse underwriting decision results solely from an oral request or inquiry, the explanation of the specific reasons and summary of rights required by subsection A of this section may be given orally.
E. In providing the specific reason for an adverse underwriting decision based on credit related information contained or not contained in an individual's consumer report, the insurance institution or agent shall provide at least the following information:
1. That the decision was based in part on a consumer report or the absence of credit history.
2. The source of the consumer report and how the individual may obtain a copy of the consumer report.
3. A description of up to four factors that were the primary cause for the adverse action that resulted from the insurance score.
F. An insurer shall not use the following any types of credit history to calculate an insurance score to determine property or casualty premiums for insurance transactions that are subject to this article and shall not knowingly use an insurance score developed by a third party if the score is calculated using any of the following types of credit history. :
1. The absence of credit history or the inability to determine the consumer's credit history unless the insurer's action is actuarially justified or the insurer treats the consumer as if the consumer had neutral credit information, as defined by the insurer.
2. Credit history or an insurance score based on collection accounts identified with a medical industry code.
3. A bankruptcy or a lien satisfaction that is more than seven years old.
4. The consumer's use of a particular type of credit card, charge card or debit card unless actuarially justified.
5. The consumer's total available line of credit, except that an insurer may consider the total amount of outstanding debt in relation to the total available line of credit.
6. An insurance score that is calculated using the income, gender, address, zip code, ethnic group, religion, marital status or nationality of the consumer as a factor. This paragraph does not prohibit an insurer from using zip code, address, gender and marital status information for underwriting purposes.
Sec. 6. Applicability
This act applies to all contracts that are entered into, renewed, extended or modified from and after December 31, 2026.
Sec. 7. Short title
This act may be cited as the "Arizona Homeowners Insurance Bill of Rights".