Existing law sets forth specific requirements for various types of insurance policies and contracts and the insurers who issue them. (Chapter 687B of NRS) Sections 2-9 of this bill establish provisions governing policies of rental obligations insurance. Section 5 of this bill defines “rental obligations insurance” to mean, in general, insurance that provides coverage to a landlord against: (1) financial loss from the nonpayment by a specific tenant of any financial obligation due pursuant to a rental agreement; and (2) damages to the premises caused by the tenant during the term of the rental agreement. Sections 3, 4, 6 and 7 of this bill define other words and terms for the purposes of this bill. Section 8 of this bill prohibits an insurer from requiring a landlord or prospective tenant to pay certain fees before the issuance of a policy of rental obligations insurance. Section 8 authorizes an insurer to require a landlord who applies for a policy of rental obligations insurance to provide certain information about a prospective tenant. Additionally, section 8 specifies the information that an insurer is authorized to consider in determining whether to issue a policy of rental obligations insurance and in calculating the premium for such a policy. Existing law sets forth the circumstances under which and the procedures pursuant to which an insurer is authorized to cancel or refuse to renew certain policies of insurance. (NRS 687B.310-687B.420) Section 8 prohibits an insurer from: (1) increasing the premium for a policy of rental obligations insurance during the term of the policy, or any renewal or extension of the policy, except as a result of any claim paid under the policy; (2) cancelling or refusing to renew a policy of rental obligations insurance during the term of the rental agreement between the landlord who was issued the policy and the tenant for whom the policy provides coverage, or any renewal or extension of the rental agreement, except for the nonpayment of a premium; or (3) issuing a policy of rental obligations insurance in which the insurer or an affiliate of the insurer is the landlord insured under the policy. Section 9 of this bill sets forth certain requirements for a policy of rental obligations insurance. Section 9 prohibits, with certain exceptions, a policy of rental obligations insurance from authorizing or requiring a landlord to assign to the insurer any right of recovery against a tenant for whom the policy provides coverage. Finally, section 9 authorizes a policy of rental obligations insurance to require a landlord to exhaust all claims against any security deposit provided to the landlord by the tenant before the insurer is required to pay any claim covered by the policy. Existing law sets forth the Residential Landlord and Tenant Act, which establishes provisions governing landlords and tenants of dwelling units. (Chapter 118A of NRS) Section 13 of this bill authorizes a landlord and a tenant or prospective tenant to enter into a rental assurances agreement, which section 11 of this bill defines, in general, to mean an agreement in which a tenant or prospective tenant agrees to pay a landlord a monthly charge to reimburse the landlord for the costs of the landlord for the premium for a policy of rental obligations insurance. Section 13 requires a charge imposed pursuant to a rental assurances agreement on a tenant or prospective tenant who becomes a tenant to be a fixed, monthly charge in an amount that is equal to the monthly share of the premium paid by the landlord for a policy of rental obligations insurance. Section 14 of this bill requires a landlord to offer to enter into a rental assurances agreement with a prospective tenant who has submitted an application to become a tenant of the landlord under certain circumstances. Section 14 prohibits a landlord who is required to offer to enter into a rental assurances agreement from denying the application of the prospective tenant if: (1) the prospective tenant enters into a rental assurances agreement; and (2) an insurer offers to issue to the landlord a policy of rental obligations insurance that will provide coverage for the prospective tenant when he or she becomes a tenant. Section 16 of this bill provides that nonpayment of any charge due pursuant to a rental assurances agreement constitutes cause for termination of a tenancy. Section 17 of this bill excludes any charge to be paid to a landlord pursuant to a rental assurances agreement from the definition of “rent.” Section 15 of this bill makes a conforming change to indicate the proper placement of sections 11 and 12 of this bill in the Nevada Revised Statutes.

Statutes affected:
As Introduced: 118A.020, 118A.060, 118A.150
BDR: 118A.020, 118A.060, 118A.150