Kansas Insurance Department
Kathleen Sebelius, Commissioner of Insurance
BULLETIN No. 1998-8, May 12, 1998
TO: Companies licensed for Fire and Extended Coverage, Inland Marine,Homeowners, Automobile Physical Damage, and General Liability.
SUBJECT: Mobile Home Programs, Inflation Guard Provisions
It has come to my attention that some insurers may be writing actual cash value (ACV) property insurance policies on various types of mobile homes in the state of Kansas with an "inflation guard" procedure used in connection with those policies. The "inflation guard" procedure generally refers to the annual percentage of increase in coverage on a structure based on the annual cost of living and building index. The term "mobile homes" should be broadly interpreted to include mobile homes, manufactured homes, modular homes, travel trailers, etc. (owner or non-owner occupied), and would contemplate that these policies are written on an actual cash value basis with the inflation guard procedure utilized with those programs. At this point, I am requesting information from companies that may be writing mobile homes with the inflation guard in Kansas.
Please provide the following information:
1. Does your company write a property insurance policy on an ACV basis on these types of properties with an inflation guard procedure utilized as part of that program? If you do, please specify the program(s) that would include this type of coverage and approximately how long this program has been utilized in the state of Kansas.
2. If your company does have such a program in the state of Kansas as referred to in paragraph #1 above, please advise us whether it is filed as part of your Homeowners Policy program, Farmowners Policy program, Dwelling Fire program, Farm Fire program, Inland Marine program, Commercial Package Policy program, or whether it is filed specifically as a mobile homeowners policy program?
3. If you write this type of coverage in the state of Kansas, is use of the inflation guard procedure optional or mandatory? How is this conveyed to your insureds? Is this "rule" filed with the Insurance Department?
4. If this program is written in the state of Kansas, please provide us with the approximate number of policies that are written in Kansas on this type of coverage on an actual cash basis with the inflation guard procedure.
We hope the foregoing questions are self-explanatory; however, should you have any questions with regard to this matter please contact Steve Crandall at (785) 296-7837 or Mel Scott at (785) 296-7838. You can e-mail your replies to Steve Crandall at: email@example.com.
Please acknowledge receipt of this bulletin and provide the requested information by June 1, 1998.