New Jersey Insurance---A Clear One Page Summary Helps Policyholders

This past week, a New Jersey Assembly committee approved Bill No. 3642, which will require homeowners insurance companies to issue to policyholders consumer information brochures that contain a one-page summary of the homeowners policy.1

Under current New Jersey law, insurers must provide to the policyholder, at the time the policy is issued and on an annual basis thereafter, a brochure including information about the National Flood Insurance Program and the insurer’s hurricane deductible program, if applicable. Bill No. 3642 adds the requirement of a one-page summary including notable coverages and exclusions under the policy. The New Jersey legislators, however, are quick to clarify the information brochure shall not be considered a replacement for the terms of the policy and is only provided for guidance to the homeowner.

Reading an insurance policy in its entirety, let alone understanding it, is dauntingly difficult for most policyholders. I read the small print found in insurance contracts every day for a living. The obscure and confusing language often makes my head spin as I try to decipher what is meant. Although not a substitute for reading the policy, having a one-page summary of key coverages and exclusions will no doubt alleviate some of the confusion or guesswork for policyholders who attempt to understand what they are buying.

My clients buy insurance for peace of mind. They rely on their agents and brokers to get the best coverage for the best price. I doubt most truly understand all the terms of their policies, and most give up when making the attempt.

For that reason alone, the one-page summary is a great idea and makes a lot of sense. Certainly, it would be nice if more states follow in the footsteps of New Jersey which, in the aftermath of Sandy, has really seized the moment by passing a number of measures for the benefit of consumers.

1 State of New Jersey Assembly Bill No. 3642 (Jan. 14, 2013).

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Anthony - January 20, 2013 9:27 AM

One better would be to copy Louisiana laws in one respect. In Louisiana public adjusters are required to have a disclosure signed revealing there are different kinds of adjuster and how they get paid. What I found funny with this law in Louisiana is only public adjusters are require to have this disclosure signed not the insurer.... Wonder why???

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