The bill amends Section 59A-18-17 of the New Mexico Insurance Code to revise the requirements for residential property insurance, specifically regarding the payment of depreciation. It mandates that insurance coverage in residential property insurance policies must cover the cost to repair or replace property without any deductions for depreciation. Additionally, if the insured chooses to perform the repairs themselves, they are allowed to include a reasonable overhead expense. The new legal language specifies that at the time of settlement, insurers are required to pay one hundred percent of the replacement cost minus depreciation, with the remaining costs to be paid upon completion of the rebuild or replacement, capped at the replacement cost or policy limits.

This amendment aims to enhance consumer protection by ensuring that homeowners receive full compensation for their property repairs without depreciation deductions, thereby improving the overall value of residential property insurance policies. The bill also maintains existing provisions that allow for the use of substitute provisions in insurance contracts, provided they are not less favorable to the insured, and it empowers the superintendent to specify minimum coverage provisions for various types of insurance policies to protect consumers and enhance information systems.

Statutes affected:
introduced version: 59A-18-17