Bill Stems from Widespread Post-Sandy Confusion on
Insurance Policies
(TRENTON) –
Legislation Assembly Democrats Ruben J. Ramos Jr., Gary Schaer, Linda Stender
and Paul Moriarty sponsored to help homeowners better understand their insurance
policies – a problem that has particularly arisen after Hurricane Sandy – was
approved 75-0 Monday by the Assembly.
The bill
(A-3642) requires that the homeowner insurance consumer information brochure
already required under state law contain a one-page summary of the policy.
“This summary
must include notable coverage and exclusions under the policy, so that there
will be no misunderstandings when consumers need to invoke their policy,” said
Ramos (D-Hudson). “Following Sandy, many homeowners were shocked to learn some
things they expected to be covered were not under their policy. It’s time for
insurance companies to provide a clearer explanation.”
On Dec. 6, the
Assembly Financial Institutions and Insurance Committee chaired by Schaer held a
hearing to review insurance issues facing residents in the aftermath of
Hurricane Sandy. One issue that arose was the many homeowners are simply not
aware of what their homeowner’s insurance policy covers. This bill – released
7-0 Monday by the insurance panel - is an attempt to provide that information in
a simple, easy to understand format that will hopefully allow homeowners to
become more aware of their policy.
“One of the most important things we’ve learned from that
hearing is that many consumers aren’t familiar with the specifics of their
policy, particularly when it comes to storm-related coverage,” said Schaer
(D-Passaic/Bergen). “Moving forward, everyone should take the time to educate
themselves on the details of their policy to make sure that they have chosen the
appropriate coverage to handle their unique needs. An educated consumer is the
best consumer, especially when dealing with complex insurance claims.”
“Understanding fully the insurance fine print can be among the
most daunting tasks consumers face,” said Stender (D-Union/Middlesex/Somerset).
“Sandy has shown us that many did not fully understand their policy, often
through no fault of their own. Insurance companies need to provide clearer and
better explanations of their policies, and this is a pro-consumer step in that
direction.”
“This is a pro-consumer bill that will surely help resolve a lot
of confusion and help homeowners make better choices when it comes to
insurance,” said Moriarty (D-Gloucester/Camden). “Insurance companies need to
provide better explanations to help avoid confusion and put consumers in a
better position to purchase the policies they need. Let’s not have a repeat of
the post-Sandy confusion.”
The summary of the consumer information brochure shall not be
considered a replacement for the terms of the insurance policy itself, and shall
not alter the policy coverage or confer additional rights, but is only provided
as guidance to the homeowner.
Also, the bill’s provisions shall not be implemented until the
Department of Banking and Insurance issues regulations providing a timeline for
implementation.
The bill now goes to the Senate for more consideration.
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