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 provisions from the laws of a foreign or alien insurer 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 cover the loss, whereas if the covered risk is only a remote cause, the loss is not covered. This change aims to enhance consumer protection and clarify the circumstances under which insurance claims can be made when multiple risks are involved.

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