The bill amends Chapter 27-7 of the General Laws regarding liability insurance by introducing a new section, 27-7-1.1, which prohibits "wasting policies." Under this new provision, all insurance policies that cover liability for property damage or personal injuries must clearly state a policy limit that is fully available for claims payment. Importantly, the bill specifies that no part of this policy limit can be allocated for the payment of legal fees or costs associated with defending a claim.

This legislation aims to ensure that policyholders have access to the full amount of their insurance coverage for claims without the risk of those funds being diminished by defense costs. The act will take effect immediately upon its passage, reinforcing the protection of insured parties in liability situations.