LRB-3204/1
PJK:jld:km
2001 - 2002 LEGISLATURE
June 5, 2001 - Introduced by Representatives Montgomery, La Fave, Rhoades,
Vrakas, Albers, Townsend, Suder and Ryba, cosponsored by Senators Burke
and Rosenzweig. Referred to Committee on Insurance.
AB434,1,3
1An Act to amend 632.05 (2) of the statutes;
relating to: limiting to property that
2is primarily residential the type of property for which the amount of loss is the
3insurance policy limits.
Analysis by the Legislative Reference Bureau
Current law provides that, if real property that is owned and occupied as a
dwelling is wholly destroyed, the amount of the loss, for insurance purposes, is the
limits of any policy covering the property. A Wisconsin administrative rule provides
that, if property owned and occupied as a dwelling is also used for commercial
purposes, except on an incidental basis, the statute regarding the amount of loss in
case of destruction does not apply to the property. The Wisconsin supreme court, in
Seider v. O'Connell, 236 Wis. 2d 211, 612 N.W. 2d 659 (2000), determined that the
administrative rule is invalid because it exceeds the statutory authority of the office
of the commissioner of insurance, which promulgated the rule. Thus, if a property
that is used for both commercial and residential purposes, such as a business over
which the business owner lives, is wholly destroyed, the amount of the loss is the
policy limits of any insurance policy covering the property. This bill provides that the
statute requiring the policy limits to be the loss amount for wholly destroyed
property applies only to property that is owned and occupied primarily as a dwelling.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB434, s. 1
1Section
1. 632.05 (2) of the statutes is amended to read:
AB434,2,62
632.05
(2) Whenever any policy insures real property
which that is owned and
3occupied by the insured
primarily as a dwelling and the property is wholly destroyed,
4without criminal fault on the part of the insured or the insured's assigns, the amount
5of the loss shall be taken conclusively to be the policy limits of the policy insuring the
6property.
