The Sunflower State, Kansas, is also known for the many natural disaster events such as tornados, hail, flood, and thunderstorm winds. It is important that Kansas property owners be prepared and properly insured against the threat of these natural disasters that can sometimes arrive unexpectedly.
The State of Kansas provides regulations for insurance companies and protection to insureds under the Unfair Methods of Competition or Unfair and Deceptive Acts or Practices.1 These regulations and protections include but are not limited to the following acts:
- False Statements
- Unfair discrimination
- Refusing to insure, or refusing to continue to insure, or limiting the amount, extent or kind of coverage unfairly
These regulations apply to all types of insurance coverages in Kansas. All insurance agents shall conduct a reasonable investigation based upon all available information before refusing to pay a claim.2 It will be considered as a deceptive act failing to not attempt in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.3 All payments to insureds should be accompanied by a statement setting forth the coverage under which payments are being made.4
Kansas State also provides the option to form an incorporated company for the purpose of organizing mutual insurance of its members against loss or damage by fire, lightning, tornado, hail or explosion other than those included in the extended coverage endorsement.5 The requirements for this option are: to form a group no less than twenty-five (25) citizens of the state, each of whom shall be a property owner and who shall collectively own property not less than one hundred thousand dollars ($100,000) in value. Companies organized under Mutual Fire and Tornado Companies will be classified under one of two groups for insurable property. The business of each class shall be conducted separately and independently of the other, and in no case, shall an assessment be made by the company upon the premium notes of one class to pay the loss or expenses of the other class,6 although any company doing business under this article may elect to confine their business to either class or to embrace both. The first class includes but is not limited to dwelling houses, barns, schoolhouses, schoolhouses furniture, churches, churches furniture, community, farm implements, livestock, wagons, household goods, wearing apparels and others. The second class includes all risks on buildings used for merchandising and manufacturing, machinery and all other property not included in the first class.
It is important for property owners in Kansas State to consider the different options available to be properly insured and understand the importance of a proper claim handling by its insurance company.
1 K.S.A. 40-2404
2 K.S.A. 40-2404 (9) (d)
3 K.S.A. 40-2404 (9) (f)
4 K.S.A. 40-2404 (9) (j)
5 K.S.A. 40-1001
6 K.S.A. 40-1002