Gill-Beach Legislation To Provide Consumers With Clear Information About Homeowners Insurance Policies Approved By Senate

Measure Addresses Problem Uncovered In Sandy’s Aftermath

TRENTON – Legislation sponsored by Senate Commerce Committee Chair Nia H. Gill and Senator Jim Beach to help improve the homeowners insurance claims process for New Jersey residents by ensuring the details of insurance policies are clearly defined for policy holders was approved today by the full Senate. The measure is intended to address the problem that some consumers encountered in the aftermath of Hurricane Sandy when they learned only after the storm that their insurance policy did not include flood insurance.

“Many homeowners who were already dealing with major property damage, and in many cases absolute devastation, in the aftermath of Sandy were dealt another blow when they attempted to recoup their losses through the insurance claims process,” said Senator Gill (D-Essex/Passaic). “In some instances, residents learned their policies did not include flood insurance and, therefore, they would not be compensated by their insurer. We have to make sure that insurance policies are clear and that homeowners know the details of their coverage before a natural disaster strikes. Providing consumers with a brief summary of the policy will help to safeguard them against unnecessary property or monetary loss in the future.”

The bill (S-2502) would require insurance companies to make policies more clear for policy holders by requiring a one-page summary of the policy, including notable coverages and exclusions under the policy, in the informational brochure currently provided to consumers. The one page summary is intended to bring homeowners’ attention to important aspects of their policy related to natural disasters, such as hurricane deductibles and flood insurance.

“Since Hurricane Sandy, many impacted New Jersey residents have been denied claims made to their insurance companies because their policies did not cover certain events. Some people believed they had been paying for flood insurance only to find out after Sandy devastated their home that they, in fact, never had flood insurance,” said Senator Beach (D-Camden). “A one-page summary that plainly defines what is and what is not covered will help make policies more straight forward and better ensure that homeowners understand their coverage details in the event they have to make a claim.”

The Senate approved the bill by a vote of 38-0. The Assembly approved the bill unanimously in January. It now heads to the Governor’s desk.

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