The House of Representatives is poised to vote on legislation (HB 6238) that prevents insurance companies from using depressed real estate market values that are less than the value of construction costs as a method for reducing settlements of claims for losses to homes and buildings.
“This legislation will prevent insurance companies from offering settlements that are lower than the depreciated construction costs,” said state Rep. Robert W. Megna (D-New Haven), the House chair of the Insurance and Real Estate Committee.
Megna, who championed the bill, which was introduced and approved recently by his committee, said it could become landmark legislation for the country.
“The current practice of using depressed real estate markets as the basis for lowering settlement offers is unfair and undermines the general method of settling building damage claims based upon the cost to repair or reconstruct,” he said.
“This bill will protect a company or individual homeowner who has a fire or some other loss to property or business,” Megna said. “It will help businesses and homeowners obtain the money they truly need for repairs or rebuilding.”