The New Jersey Department of Banking and Insurance announced that starting in June, New Jersey consumers buying or renewing homeowners, condominium, renters, mobile home, or dwelling fire insurance policies will receive a one-page summary of their policy that clearly explains terms, coverages and exclusions.
The one-page summaries, which are required by legislation signed into law by Governor Chris Christie in May 2013 (P.L. 2013, c.53), are aimed at helping consumers better understand their homeowners policies in the aftermath of Superstorm Sandy, according to the April 14 announcement.
The Department of Banking and Insurance said that following the signing of the law in May 2013, the department developed the regulations and worked with the insurance industry to write the one-page summaries. The final regulations and one-page templates were approved in March of this year, with a 90-day implementation period.
When asked about the process for developing final regulations and one-page templates, a department spokesman told Insurance Journal that, “as you might imagine, this issue required extensive communication with the insurance industry.”
“As we worked with New Jersey consumers following that devastating storm, we saw that some homeowners didn’t fully understand their homeowners insurance policy,” said New Jersey’s Banking and Insurance Commissioner Ken Kobylowski.
Kobylowski added, “For example, some consumers believed that homeowners policy covers flood damage. It does not. Flood insurance must be purchased separately. This one-page summary is one way the state is working to raise awareness of insurance issues so consumers understand clearly what their policies do and do not cover.”
The documents were developed by the department in consultation with the state’s insurers. The department has developed model summaries that explain the common coverages, note general policy features, and delineate the notable coverages and exclusions by type of loss for the five most common types of homeowners insurance in New Jersey. These include: homeowners, renters, condominium, mobile home and dwelling fire policies. The summaries must be on one side of a single, standard 8½ x 11 inch paper and printed in not less than 10-point type.
The new law also allows insurers whose homeowners policy does not fit into the templates developed by the department to create their own one-page summary document, subject to the department review.
“We expect that the one-page summary will be a valuable tool for consumers in selecting the homeowners coverage they need,” said Kobylowski. “It is very easy for consumers to skim over an insurance policy instead of reading it carefully and asking questions of a broker or insurance carrier. I strongly urge consumers to read these one-page summaries and their policies carefully. Just taking this step can help them make better informed decisions about insurance.”
The following is a summary template for a homeowners policy. All templates including templates for renters, condominium, mobile home and dwelling fire policies can be found at the New Jersey Department of Banking and Insurance website.
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