A bill proposed in the wake of Superstorm Sandy that would have insurers produce a single-page summary of a homeowners' policy in New Jersey moved a step closer to passage after an Assembly committee approved language the industry can live with.
On Jan. 14, the Financial Institutions and Insurance Committee sent to the Assembly floor a bill (A-3642) that would require insurers writing homeowners' policies to provide a consumer-information brochure “written in a simple, clear, understandable, and easily readable way” explaining the hurricane deductible and providing information about flood insurance.
As first reported in the The Star-Ledger, the reason for the bill is that Superstorm Sandy demonstrated that consumers do not understand their insurance policies and the bill is an effort to clear-up that confusion, explained Assemblyman Gary Schaer, D-Bergen and Passaic, a primary sponsor.
Under the legislation, the one-page summary insurers would be required to provide would explain notable coverages and exclusions as determined by the Commissioner of Banking and Insurance.
Chuck Leitgeb, vice president of the Insurance Council of New Jersey, who testified at yesterday’s committee hearing, told PC360 that the bill as it now stands “is something [insurers] can live with.” He says insurers’ original objection to the bill was fear that it would be interpreted as the language in the insurance policy. The amended legislation makes it clear that the summary does not serve as replacement for policy language and does not change the meaning of the policy in any way.
Leitgeb says the industry understands the reasons for the Assembly’s action, and insurers support the bill as it currently is. He believes much of the confusion after Sandy stemmed from consumers not understanding who provides flood coverage.
However, he emphasized that “there is no substitute for consumers reading their policy and asking questions. The ultimate goal, he says, is educating the consumer. He credited both the New Jersey Department of Banking and Insurance and the Insurance Information Institute with putting information out there for consumer to view. The challenge, he says, is getting consumers to pay attention and focus on the purchase of their homeowners insurance with as much attention as they do a new car.
“The goal is to get better information to the consumer and get them be more focused on what is in their policy,” says Leitgeb.
A companion bill is waiting introduction in the State Senate and is awaiting re-introduction in the Assembly.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
