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What Homeowners Need to Know About MPIUA’s New Rule on Primary Insurance Coverage

by | Apr 15, 2025 | Education

What Homeowners Need to Know About MPIUA’s New Rule on Primary Insurance Coverage

If your Massachusetts property is insured through the FAIR Plan (MPIUA) and has a high replacement cost, important changes are coming in 2025 that may affect your policy. At Risman Insurance Agencies, we’re here to break it down and make sure you stay compliant and fully protected.

🔔 What’s Changing?

1. Primary Insurance Coverage Requirement – Effective April 15, 2025

For Homeowners (HO-2, HO-3) and Dwelling (DP-2, DP-3) policies, MPIUA is implementing new rules for homes valued at or above $1,000,000:

  • If 90% of your home’s estimated replacement cost exceeds $1,000,000, then you must:

    • Purchase separate excess insurance beyond the $1M MPIUA limit, OR

    • Add the HO 04 56 – Special Loss Settlement Endorsement (which allows Coverage A to be less than full reconstruction value).

  • MPIUA will remain the primary insurer, and the excess insurance will provide coverage above $1M.

  • Excess insurance must be obtained by your agent—MPIUA does not provide it.

  • Within 30 days of the policy effective date, your agent must submit proof of excess insurance (a copy of the excess policy or binder) to:
    📧 excesspolicy@mpiua.com

  • If this is not done, MPIUA may apply forced endorsements, such as reducing your settlement to actual cash value.

2. New Insurance-to-Value Requirement – Effective February 1, 2025

Another key change that may impact your premium and eligibility:

  • For all new business with policy effective dates on or after February 1, 2025, Coverage A must be at least 90% of the estimated reconstruction cost.

This is a change from the prior 80% requirement and is aimed at making sure homes are properly insured to avoid underinsurance penalties at the time of a claim.

🔧 What If My Coverage A Is Below 90%?

If you’re not ready to meet the 90% requirement, MPIUA offers options:

  • HO 04 56 – Special Loss Settlement Endorsement: Allows you to insure the property at 50%, 60%, or 70% of the replacement cost and still receive full replacement cost coverage (subject to policy limits and terms).

  • HO 04 81 – Actual Cash Value Endorsement: If no endorsement is added, and your Coverage A is below 90%, MPIUA may automatically settle future claims on an actual cash value basis, which subtracts depreciation.

🤔 What Does This Mean for You?

If you’re a homeowner or landlord with a property insured by MPIUA, you should:

✅ Review your current Coverage A limit
✅ Check your home’s replacement cost estimate
✅ Contact us to secure excess insurance, if applicable
✅ Avoid forced policy changes or coverage gaps

🛡️ How Risman Insurance Agencies Can Help

At Risman Insurance Agencies, our expert team will:

  • Evaluate your replacement cost estimate

  • Help you meet the 90% coverage requirement

  • Shop and secure appropriate excess insurance with a trusted carrier

  • Submit all required documentation to MPIUA for compliance

  • Ensure your policy is optimized for coverage and premium

📞 Have questions or think this applies to you?
Reach out to your Risman Insurance agent today!

Or request a review online here:
👉 Click Here to Request a Quote

⚠️ Don’t Wait Until Your Renewal

These changes can impact both current clients and new prospects looking for homeowners insurance in Massachusetts. Let’s make sure your policy is compliant, your coverage is solid, and your peace of mind is intact.

Disclaimer: Coverages and endorsements may vary by insurance carrier. Always consult your licensed agent to determine the best option for your property.