The bill amends Section 59A-18-17 of the New Mexico Insurance Code to clarify coverage for certain excluded risks in insurance contracts. It maintains existing provisions regarding standard provisions in insurance contracts, the approval of substitute provisions by the superintendent, and the requirement for residential property insurance policies to cover repair or replacement costs without depreciation deductions. Additionally, it allows for the use of similar provisions from foreign or alien insurers and specifies that policies issued by domestic insurers for delivery in other jurisdictions may include provisions permitted under those jurisdictions.

A significant new insertion in the bill is the provision that addresses losses caused by a combination of covered and specifically excluded risks. It states that if a covered risk is the efficient proximate cause of the loss, the insurance contract must provide coverage for that loss. Conversely, if the covered risk is only a remote cause of the loss, coverage will not apply. This change aims to enhance clarity and consumer protection in insurance coverage related to complex loss scenarios.

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