By Daniel Pickett, Sedgwick New York
On May 6, 2013, the New Jersey state legislature approved Assembly Bill A-3642, which now becomes Public Law 2013, c.53, requiring homeowners insurance policies delivered or renewed in New Jersey to contain a one-page summary of the policy which identifies any notable coverages or exclusions.
Under the prior law, when a homeowners insurance policy was issued or renewed, insurers were required to provide a consumer information brochure to the insured which included certain information about the National Flood Insurance Program as well as the insurer’s hurricane deductible program. The amended law, which was introduced in the wake of Super Storm Sandy, now expressly requires the brochure to be written in a manner that is simple, clear, understandable and easily readable. It also expands the contents of the brochure to include the one-page summary. The law, which goes into effect in 90 days, leaves it to the New Jersey Commissioner of Banking and Insurance to determine which coverages and exclusions are to be considered “notable”.
The law explicitly provides that the summary is not to be considered a replacement for the terms of the policy or as having the effect of altering coverage terms. Additionally, it provides that the summary will not confer new or additional rights beyond those expressly provided by the policy. Indeed, it requires that the summary expressly state that it is only provided to the homeowner as a guide to understanding the terms of the policy. It is anticipated that this should thwart any attempts by policy holders to assert that the summary is evidence that coverage is broader or different from that provided for by the terms, conditions and exclusions of the policy.