A bill proposed in the wake of Superstorm Sandy that would haveinsurers produce a single-page summary of a homeowners' policy inNew Jersey moved a step closer to passage after an Assemblycommittee approved language the industry can live with.

On Jan. 14, the Financial Institutions and Insurance Committeesent to the Assembly floor a bill (A-3642) that would requireinsurers writing homeowners' policies to provide aconsumer-information brochure “written in a simple, clear,understandable, and easily readable way” explaining the hurricanedeductible and providing information about flood insurance.

As first reported in the The Star-Ledger, the reason for thebill is that Superstorm Sandy demonstrated that consumers do notunderstand their insurance policies and the bill is an effort toclear-up that confusion, explained Assemblyman Gary Schaer,D-Bergen and Passaic, a primary sponsor.

Under the legislation, the one-page summary insurers would berequired to provide would explain notable coverages and exclusionsas determined by the Commissioner of Banking and Insurance.

Chuck Leitgeb, vice president of the Insurance Council of NewJersey, who testified at yesterday’s committee hearing, told PC360that the bill as it now stands “is something [insurers] can livewith.” He says insurers’ original objection to the bill was fearthat it would be interpreted as the language in the insurancepolicy. The amended legislation makes it clear that the summarydoes not serve as replacement for policy language and does notchange the meaning of the policy in any way.

Leitgeb says the industry understands the reasons for theAssembly’s action, and insurers support the bill as it currentlyis. He believes much of the confusion after Sandy stemmed fromconsumers not understanding who provides flood coverage.

However, he emphasized that “there is no substitute forconsumers reading their policy and asking questions. The ultimategoal, he says, is educating the consumer. He credited both the NewJersey Department of Banking and Insurance and the InsuranceInformation Institute with putting information out there forconsumer to view. The challenge, he says, is getting consumers topay attention and focus on the purchase of their homeownersinsurance with as much attention as they do a new car.

“The goal is to get better information to the consumer and getthem be more focused on what is in their policy,” says Leitgeb.

A companion bill is waiting introduction in the State Senate andis awaiting re-introduction in the Assembly.