TRENTON – The state Senate approved a bill Monday to help homeowners better understand their insurance policies by a 38-0 vote. 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 Assemblyman Ruben J. Ramos Jr. (D-Hudson), one of the sponsors of the bill. “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 Assemblyman Gary 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.”
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 was approved by the Assembly in January now heads to the governor.