Homeowners insurance – Do you know what your policy covers?
Come June first, anyone buying or renewing homeowners insurance in New Jersey will receive a one-page summary of their policy that clearly explains its terms, coverages and exclusions.
The summaries are designed to help consumers better understand their policies in the aftermath of Superstorm Sandy.
"As we worked with New Jersey consumers following that devastating storm, we saw that some homeowners didn't fully understand their homeowners insurance policy especially when it came to flood damage," said commissioner of the New Jersey Department of Banking and Insurance Ken Kobylowski. "Some consumers believed that their standard homeowners policy covered flood damage when it doesn't. Flood insurance has to be purchased separately. The one-page summary will help consumers clearly understand what is covered and what is not."
The Department of Banking and Insurance worked closely with the state's insurers to develop the documents. The summaries will explain the common coverages, note general policy features and delineate the notable coverages and exclusions by type of loss for the five most common types of homeowners insurance in New Jersey which include homeowners, renters, condominium, mobile home and dwelling fire policies.
"We expect that the one-page summary will be a valuable tool for consumers in selecting the homeowners coverage they need. It is very easy for consumers to skim over an insurance policy instead of reading it carefully and asking questions of a broker or insurance carrier," Kobylowski said. " I strongly urge consumers to read these one-page summaries and their policies carefully. Just taking this step can help them make better informed decisions about insurance."
Homeowners insurance policies are typically written over a one-year period and when they come up for renewal, policy-holders have the ability to shop around for better deals, according to Kobylowski.
"We now have more insurance companies writing homeowners insurance in New Jersey than prior to Superstorm Sandy, so the options for residents are many," he said.