N.J. Bill Would Require Homeowners Insurers to Provide Policy Summary

January 17, 2013Email ThisPrintNewslettersTweetArticle6 Comments

The New Jersey Assembly’s financial institutions and insurance committee gave approval Monday, Jan. 14, to a recently introduced bill that seeks to make it easier for homeowners to understand what their policy covers and does not cover.

The bill, A3642, would require homeowners insurers to give policyholders a one-page summary of the policy explaining “notable coverages and exclusions under the policy” that are “written in a simple, clear, understandable, and easily readable way.”

What constitutes “notable” coverages or exclusions would be determined by the state’s commissioner of banking and insurance. The copy of the proposed bill can be found at the N.J. Office of Legislative Services website (a PDF file).

Under the proposal, the one-page summary would be added into the homeowners insurance consumer information brochure provided to the policyholder when the policy is purchased or renewed. Under the current law, the homeowners insurance consumer information brochure contains information that explains the insurer’s hurricane deductible program, if any, as well as information on the National Flood Insurance Program.

The bill was introduced to help clear up some confusions reported in the wake of Superstorm Sandy. For example, many homeowners were surprised to find out about some of the exclusions when they filed Sandy claims and that the federal flood insurance from the National Flood Insurance Program is subject to certain limitations, according to a report in The Star-Ledger. The bill was sponsored by Ruben Ramos (D-Hudson), Gary Schaer (D-Bergen and Passaic), Linda Stender (D-Middlesex, Somerset and Union) and Paul Moriarty (D-Camden and Gloucester).

Committee Included Amendments to Assuage Insurers’ Concern

The Assembly’s financial institutions and insurance committee also added a couple of amendments to allay insurers’ concerns before green-lighting the measure. Insurers have expressed concern that the one-page summary might create legal vulnerabilities for insurers in cases involving potential lawsuits.

The committee tried to address that issue by adding an amendment that says the one-page summary shall explicitly state that it is only guidance and not the actual policy.

The amendment is as follows: “The summary shall not be considered a replacement for the terms of the policy of insurance, shall not have the effect of altering the coverage afforded by the policy, and shall not confer new or additional rights beyond those expressly provided for in the policy. The summary shall expressly state that the summary is only provided as guidance to the homeowner in understanding the terms of the policy of insurance.”

The committee also added an amendment that says the department of banking and insurance would decide the timeline for when the insurers would have to start providing the summary. The amendment states: “This act shall take effect on the 90th day following enactment except that the act’s provisions shall not be implemented until the Department of Banking and Insurance, by regulation, issues a timeline for implementation.”

 

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Texas Homeowners Pay Highest US Insurance Premiums

December 21, 2012Email ThisPrintNewslettersTweetArticle4 Comments

An industry group says Texas homeowners are paying the highest insurance premiums in the country.

The report was released Tuesday by the National Association of Insurance Commissioners.

The Dallas Morning News reported the study is based on premiums collected in 2010, the most recent year for available nationwide data.

The average annual cost of the most commonly sold policy in Texas was $1,560, about 3.2 percent more than figures from a year earlier. The national average was $909.

Rick Gentry of the Insurance Council of Texas says adverse weather creates losses. He says such losses, from catastrophes such as tornadoes, hailstorms and hurricanes, drive the price of insurance.

Alex Winslow with the consumer group Texas Watch says prices continue to climb while coverage is getting slashed.

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Email ThisPrintNewslettersTweetCategories: Texas / South Central NewsTopics: catastrophes, hailstorms, homeowners insurance, Hurricanes, insurance premium, National Association of Insurance Commissioners, Texas, tornadoesHave a hot lead? Email us at newsdesk

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Florida Approves State Farm 6.4% Homeowners Rate Increase

September 28, 2012Email ThisPrintNewslettersTweetArticle2 Comments

Florida regulators have approved an average 6.9 percent rate hike for State Farm Florida Insurance Co., which is the insurer’s fifth increase in as many years.

The insurer had initially sought an average 14.9 percent increase citing  hurricane and underwriting losses.

In addition to the 6.9 percent average increase in homeowner rates, rates for renters will increase by six percent while rates for condominium owners will drop by six percent. The new rates will apply to renewal policies, effective Feb. 1, 2013.

At a recent public hearing, executives said the Winter Haven, Fla.-based insurer had seen its surplus drop from $822 million in 2007 to $368 million in 2011. They also said that following the 2004 hurricane season it had to borrow $750 million from its parent company, State Farm Mutual, an amount it has yet to pay back.

Regulators, however, objected to State Farm Florida’s proposed 16 percent profit and contingency factor included in their rate proposal and the 10.8 percent commission it said it was paying agents despite not writing new business.

The approved 6.9 figure is fifth increase the insurer has received since 2009. That year, the insurer received a 27.9 percent increase, which was followed by a four percent increase in 2010.  State Farm also received approvals for 6.6 percent and 18.8 percent hikes, which were implemented over a two-year period in 2011-2012.

State Farm Florida spokesperson Michael Bower said the insurer will not appeal the state’s Office of Insurance Regulation decision.

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Landrieu: Homeowners Entitled to Insurance Money, not Lenders

September 25, 2012Email ThisPrintNewslettersTweetArticleComments

U.S. Senator Mary L. Landrieu, D-La., announced that the U.S. Department of Housing and Urban Development (HUD) has urged Federal Housing Administration (FHA) mortgage lenders to ensure that homeowners receive the insurance payments they are entitled to from damage due to Hurricane Isaac.

Following Hurricane Katrina, there were incidents where several mortgage lenders withheld insurance proceeds from hurricane survivors, according to Sen. Landrieu.

Sen. Landrieu sent a letter to HUD on September 10, asking the agency to use its existing authority to curb this issue among FHA mortgage lenders.

As posted on the senator’s website, Sen. Landrieu’s letter reads: “During the aftermath of Hurricane Katrina, there were several unscrupulous mortgage lenders who unnecessarily withheld hazard and flood insurance proceeds from homeowners. These homeowners were entitled to the proceeds from these programs. More importantly, these homeowners were desperately in need of funds to assist them in rebuilding their homes and lives that were impacted by Katrina. Fortunately, the damage incurred recently in many areas is not as severe as it was in 2005. However, there will still be homeowners in numerous hard hit communities who will be entitled to hazard or flood insurance proceeds. In order to avoid a repeat of 2005, I respectfully request that you utilize your existing authority to ensure that homeowners receive the insurance proceeds that they are entitled to.

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North Carolina Insurers Seek 17.7% Increase in Homeowners Rates

October 4, 2012Email ThisPrintNewslettersTweetArticle1 Comments

North Carolina homeowners could see their first rate increase in four years as the state’s rating bureau called for a statewide average 17.7 percent increase in loss cost rates.

The North Carolina Rate Bureau filed for the rate increase on behalf of all property insurers. If approved as filed, it would increase loss cost rates by 17.7 percent. That figure includes a homeowners’ rate hike of 17.4 percent, a rental rate increase of 30 percent and a 29.5 percent increase in condominium coverage.

Rate Bureau General Manager Ray Evans said the rate increase is needed due to several factors including the rise of reinsurance. He said reinsurance is a major concern for insurers such as the North Carolina Farm Bureau with a concentration of policies in the state.

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Conn. Senate Passes Anti-Price-Gouging Bill to Help Homeowners

April 26, 2012Email ThisPrintNewslettersTweetArticle1 Comments

The Connecticut Senate has voted to expand consumer protections from price gouging during major storms, such as the freak October snow storm that hit the state last year.

Senators voted 33-to-3 Wednesday in favor of the bill, which prohibits “unconscionably excessive” prices for storm-related services, such as snow removal, flood abatement services, lodging and post-storm cleanup and repair services.

The bill also states that certain goods cannot be sold at unconscionably high prices. The provisions would take effect after the governor declares there is a severe weather event.

Sen. Kevin Witkos said he saw unscrupulous people taking advantage of homeowners during the heavy snow storms of 2010 and 2011, advertising roof clearing for prices that jumped from $800 to $2,000. The bill now moves to the House for further action.

 

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Email ThisPrintNewslettersTweetCategories: East NewsTopics: Connecticut, stormsHave a hot lead? Email us at newsdesk

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N.Y. Attorney General Warns Homeowners About New Mortgage Scams

April 5, 2012Email ThisPrintNewslettersTweetArticleComments

New York’s attorney general is warning homeowners to be alert for phone calls from people posing as bank or government officials to get personal information through bogus offers of help with their mortgages.

Eric Schneiderman says the calls are connected to the recent national settlement of loan management and foreclosure abuses by banks.

He says some of the scammers are offering help making a loan payment and asking for a borrower’s bank account routing information. Others may ask for an upfront fee for help with a mortgage modification.

In any case, Schneiderman says the best defense is refusing to provide personal and financial information that their actual banks will already have. And charging the upfront fees is illegal in New York.

Suspicious calls should be reported to Schneiderman’s office.

 

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Email ThisPrintNewslettersTweetCategories: East NewsTopics: Fraud, home foreclosureHave a hot lead? Email us at newsdesk

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