Prohibits mortgagees from requiring mortgagors of certain residential real property to purchase flood insurance exceeding a coverage amount that exceeds the balance as of the beginning of the year for which the policy shall be in effect, or that includes coverage for contents.
STATE OF NEW YORK
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7125--A
2023-2024 Regular Sessions
IN SENATE
May 18, 2023
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Introduced by Sens. BRESLIN, PALUMBO -- read twice and ordered printed,
and when printed to be committed to the Committee on Judiciary --
recommitted to the Committee on Judiciary in accordance with Senate
Rule 6, sec. 8 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the real property law, in relation to prohibiting mort-
gagees from requiring mortgagors of certain real property to purchase
flood insurance exceeding certain limits
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The real property law is amended by adding a new section
2 283 to read as follows:
3 § 283. Limits on amount of flood insurance required by mortgagee. No
4 mortgagee shall require a mortgagor to whom the mortgagee makes,
5 increases, extends, or renews any loan or line of credit secured by
6 improved residential real property to purchase or pay for flood insur-
7 ance on such residential real property: (1) at a coverage amount that
8 exceeds the outstanding principal mortgage balance as of the beginning
9 of the year for which the policy shall be in effect; or (2) that
10 includes coverage for contents. In each instance where a mortgagee
11 requires a mortgagor to purchase or pay for flood insurance on such
12 residential real property, the mortgagee shall provide notice to the
13 mortgagor at the time the mortgagee is notified of the need to purchase
14 or pay for flood insurance that states the following in clear and
15 conspicuous print: 'Please note that the flood insurance we are requir-
16 ing you to purchase will only protect your creditor or lender's interest
17 in your property. The insurance may not be sufficient to pay for many
18 needed repairs after a flood and may not compensate you for your losses
19 in the property due to the flood. If you wish to protect your home or
20 investment, you may wish to purchase more flood insurance than the
21 amount we are requiring you to buy.'
22 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07415-03-4
