Homeowner's insurance specified exclusions prohibited when damage done by peace officer

A homeowner’s insurance policy coverage exclusion for certain circumstances involving peace officers will be banned.

Per a new law that takes effect Jan. 1, 2027, a homeowner’s insurance policy must not exclude coverage for property damage if the homeowner is an innocent third party entitled to compensation owed by a local government unit due to damage caused by a peace officer in the course of executing a search warrant or apprehending a criminal suspect, and the damage results from a peace officer’s use of chemical irritants, smoke screens or diversionary devices.

The change applies to policies offered, issued or renewed on or after the effective date.

An insurer must allow a homeowner to choose a mitigation contractor and, if necessary, an industrial hygienist to assess and remediate damage due to the use of the peace officer’s chemical irritants, smoke screens or diversionary devices. The work of the mitigation contractor or industrial hygienist must follow recognized industry standards and chemical manufacturer guidelines.

If an insurer pays benefits to or on behalf of a homeowner for the damage, the insurer is subrogated to the homeowner’s right to recover just compensation from the responsible local government unit.

Local government reimbursement may be denied only with proof the payment was obtained by fraud or the insurer acted in bad faith. An insurer can bring legal action to recover the amount if a reimbursement isn’t made and is entitled to reasonable attorney fees, costs and disbursements including interest.

If an insurer is reimbursed by a local government unit, the insurer must remit to the homeowner an amount equal to any deductible the homeowner has paid toward the damage.

Rep. Kelly Moller (DFL-Shoreview) and Sen. Bonnie Westlin (DFL-Plymouth) sponsor the law.

HF4133*/SF4406/CH68

HF4133* / SF4406 / CH68