Ramos, Schaer, Stender & Moriarty Bill to Help Homeowners Better Understand Insurance Policies Clears Senate Panel

Bill Stems from Widespread Post-Sandy Confusion on Insurance Policies

(TRENTON) - The Senate Commerce Committee today advanced legislation sponsored by Assembly Democrats Ruben J. Ramos Jr., Gary Schaer, Linda Stender and Paul Moriarty to help homeowners better understand their insurance policies - a problem that has particularly arisen after Hurricane Sandy.
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 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 will now return to the Senate President, who will decide whether to post it for a floor vote.

To read more, please visit the New Jersey General Assembly Democratic Office Web site.

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