A handful of insurance companies paid $10,000 fines to the Maryland Insurance Administration for either failing to include in their homeowners policies sewer and drain backup coverage or not including language of the change in policies, records show.

An MIA bulletin (08-17) explained a new state law, which took effect Oct. 1, 2008, requiring insurers to notify policyholders in new and renewal homeowners policies that insurers in the state must cover loss caused by or resulting from water that backs up through sewers and drains not caused by the policyholder’s negligence. Specific language to be included in policies was included in the bulletin.

Among those fined in November 2009 were: Electric Insurance Co., based in Beverly, Mass., which offered the required coverage, but did not include necessary language in policies issued between October 2008 and May 2009.

Metropolitan Group Property & Casualty Insurance Co., Metropolitan Property & Casualty Insurance Co. and Economy Premier Assurance Co., all based in Warwick, R.I., failed to include language about the coverage in policies issued between Oct. 1 and Dec. 9, 2008.

Everett Cash Mutual Insurance Co. did not offer the coverage on new and renewal policies issued between Oct. 1, 2008, and July 30, 2009.

This story originally appeared in the May 2010 print edition of Insurance & Financial Advisor.