"There’s a great deal of suffering in the world, Sir. We ought to do our part toward relieving it."1

New Jersey policyholders who have not been fully paid their insurance benefits following losses from Hurricane Sandy should have some optimism and hope this Christmas Eve. Their reasonable expectations of insurance coverage and benefits are solidly backed by New Jersey insurance law. Insurance company claims departments are required to fulfill their promise of relieving a great deal of suffering caused by Hurricane Sandy by fully and promptly paying insurance benefits purchased before Hurricane Sandy struck.

New Jersey insurance law mandates insurers meet their customers’ reasonable expectations of coverage:

Even if a particular phrase or term is capable of being interpreted in the manner sought by the insurer, where another interpretation favorable to the insured reasonably can be made, that construction must be applied…In this regard, coverage clauses should be interpreted liberally, whereas those of exclusion should be strictly construed. . . .Finally, insurance contracts are to be construed in a manner that recognizes the reasonable expectation of the insured.2

How refreshing that New Jersey judges make insurance law which relieves suffering and makes rules of conduct that all insurers (including wealthy insurers) must follow, rather than merely talking about important rules of conduct when it is politically expedient.

This follows my post from last week, Hurricane Sandy Insurance Claim Denials in New Jersey, which should be read again, along with Simonetti, as I start on an analysis of New Jersey insurance causation law the day after Christmas. I plan to post about this area of New Jersey law for a number of weeks. I hope it helps policyholders suffering after Hurricane Sandy to gain insurance recovery otherwise lost.

If followed, New Jersey insurance law should prevent insurance adjusters from being referred to as Ebenezer Scrooge because it requires adjusters to pay the full insurance benefits required by New Jersey law and not callously deny benefits owed.

Merry Christmas and Peace to All.

1 Horatio Alger Jr., "Job Warner’s Christmas," Harper’s New Monthly Magazine, December 1863.
2 Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 429, 859 A.2d 694, 698-99 (N.J. App. Div. 2004).