On May 2, 2013, Maryland Governor Martin O’Malley signed House Bill 695, adding a new provision to Maryland’s Insurance Code addressing anti-concurrent causation clauses in insurance policies. These clauses operate to exclude all coverage where an excluded cause of loss contributes concurrently or in sequence with a covered cause of loss to produce damage. In catastrophic events, such as hurricanes, they typically come into play where damage is caused both by wind, usually a covered cause of loss, and flood, generally an excluded cause of loss.

House Bill 695 requires that any insurance company that issues a homeowners policy in the State of Maryland containing an anti-concurrent causation clause provide yearly notice to the policyholder that:

  1. is clear and specific;
  2. describes the anti-concurrent causation clause;
  3. informs the insured to read the policy for complete information on the exclusions; and
  4. states that the insured should communicate with the insurance producer or the insurer for additional information regarding the scope of the exclusions.

House Bill 695 goes into effect on June 1, 2013, and will apply to all homeowners insurance policies issued, delivered or renewed in Maryland on or after October 1, 2013. A copy of House Bill 695 is available here.