The bill establishes a new provision in the New Mexico Insurance Code that clarifies the status of foster children in relation to homeowners insurance. Specifically, it states that minor children placed in substitute or foster care by the children, youth, and families department or a licensed child placement agency are not considered residents of the foster homes for the purposes of homeowners insurance.

This legal clarification ensures that the placement status of these children does not disqualify them from coverage under any premises liability insurance policy. By enacting this new section, the bill aims to protect the rights and insurance coverage of foster children, ensuring they are not adversely affected by their living arrangements.