Notice of residential policy changes

Sec. 16. (a) This section applies to a policy of insurance that: (1) covers first party loss to property located in Indiana; and (2) insures against loss or damage to: (A) real property consisting of not more than four (4) residential units, one (1) of which is the principal place of residence of the named insured; or (B) personal property in which the named insured has an insurable interest and that is used within a residential dwelling for personal, family, or household purposes. (b) An insurer that reduces, restricts, or removes, through a rider or an endorsement, coverage provided by a policy of insurance must provide to the named insured written notice, through the United States mail or by electronic means, of the changes to the policy. The written notice required by this subsection must: (1) be part of a document that is separate from the rider or endorsement; (2) be printed in at least 12 point type, 1 point leaded; (3) consist of text that achieves a minimum score of forty (40) on the Flesch reading ease test or an equivalent score on a comparable test approved by the commissioner as provided by IC 27-1-26-6; (4) identify the forms, provisions, or endorsements that are changed; (5) indicate that the named insured may contact the servicing insurance producer for the policy, if any, or the insurer for assistance with any questions concerning the policy changes; (6) indicate whether a premium adjustment will result from the policy changes; and (7) set forth any options available to the named insured to repurchase the coverage that has been reduced, restricted, or removed. (c) The insurer bears the burden to prove that notice was sent to the named insured in accordance with this section. If the notice is sent through the United States mail, proof of mailing as described in IC 27-7-6-7 is sufficient proof of the notice. (d) The commissioner may adopt rules under IC 4-22-2 to implement this section.