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 means that their placement status will not disqualify them from coverage under any premises liability insurance policy.

This legislative change aims to ensure that foster children are adequately protected under insurance policies, thereby preventing any potential gaps in coverage that could arise due to their living arrangements. By explicitly stating that foster children are not residents of the homes where they are placed, the bill seeks to promote better insurance practices and support for vulnerable children in the foster care system.