New Law Aims To Help Homeowners Better Understand Insurance Policies

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TRENTON – Legislation intended to help homeowners better understand insurance policies – a problem that has particularly arisen after Hurricane Sandy – has been signed into law.

The law (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), a sponsor 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 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 law 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.

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.


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