About one year after Superstorm Sandy, PC360/NU contacted New Jersey Commissioner Kenneth E. Kobylowski to find out his thoughts on the state of insurance in the Garden State. (AP Photo/Mel Evans)
Let’s start with affordability and availability. Any shifts in either since Sandy?
More important is availability and it is still very good at the coast, knock on wood (he actually did). In fact a couple new companies have entered our market—specifically to write on the coast—since Sandy.
In terms of affordability, I have not seen any rate filings this year with a request that is out of the ordinary from years past.
Why? Isn’t that surprising?
I think immediately following the storm, this office and other state agencies were very mindful in being deliberate and thoughtful in our communication with the industry. Insurers know what to expect and that goes a long way.
So, they respected the communication following the storm. They may not have been exactly happy with everything you had to say—not allowing hurricane deductibles, for instance—but they appreciated the approach?
Everyone acted like adults. This was a challenging situation. We were in communication with insurers before the storm to find out their catastrophe plan. We monitored the marketplace daily and got reports. When a problem surfaced, we recognized it quickly and picked up the phone and called the company. The industry was extraordinarily responsive.
Can you give an example?
There was an issue with wind deductibles. Some policyholders were unaware of them and the approach taken by the insurer wasn’t necessarily fair to the consumer. We called. They made good and did the right thing.
How do you think increases in flood insurance will challenge residents?
It’s a difficult thing because we have no control over that. It’s a federal program. People don’t understand premiums were on the rise before Sandy happened with the Biggers-Waters Act. It’s going to be a difficult for people who are still trying to get clarity with new flood maps and building requirements. We do what we can to direct them to resources so homeowners can start rebuilding in a way that’s appropriate for them.
What exactly has DOBI done to help policyholders after the storm?
We have been up and down the coast, bringing DOBI directly to the towns—spending entire days, into the evening, at locations. The state Department of Human Services has been there as well as FEMA. We continue to do it and we’ll keep at it as long as the need exists.
And a year after that need is still out there?
Yes. This is still an emotionally and physically stressful situation and it helps for people to be able to talk face-to-face. We are also running a mediation program for policyholders at an impasse with their insurers. It’s had a 70 percent success rate—575 filed requests for mediation and 338 reached a settlement.
Are there any trends in the New Jersey Insurance Underwriting Association (last-resort insurer, commonly called the FAIR Plan)?
Policies here have actually been slightly down from prior to Sandy. To us, the FAIR Plan is the canary in the coal mine. The fact policies are down leads us to conclude there is no availability issue.