By Chief Political Correspondent Michael Aron
NJ Today
Today, it was the insurance industry’s turn to brief a legislative committee on its storm performance and the fallout on the issues raised.
According to Insurance Commissioner Ken Kobylowski, people purchase homeowners insurance as a requirement for getting a mortgage. “They take that policy, put it in the drawer somewhere and may never look at it, and hopefully never have to look at it. Unfortunately Sandy changed all that,” said Kobylowski.
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In his testimony, Kobylowski described his department as fully engaged with the public and the insurance industry over the past month, including six visits in a mobile office to various parts of the state. The industry is sound, he said, and doing its best to process 452,000 New Jersey claims.
New Jersey Manufacturers Insurance Company said it’s about halfway through processing 43,000 homeowner claims and 9,000 auto claims. In determining the priority of claim, NJM’s CEO Bernie Flynn explained that “if the tree has fallen on the fence in the backyard and isn’t hurting anything else, that won’t get the same attention as the tree that’s in the bedroom or living room and you can’t live in your home.”
Several issues raised by legislators related to the difference between flood insurance and homeowners: neither covers personal possessions in a basement apartment, the industry relies on adjusters from out of state, different deductibles apply between a tropical storm and a full-fledged hurricane and the downgrading of Sandy saved some affected homeowners many thousands of dollars.
Also testifying were Allstate, the state’s largest insurer, and the Insurance Council of New Jersey.
Commissioner Kobylowski urged consumers to call his department if they’re having difficulty with an insurer. “The biggest issues that we’re seeing right now are just the companies dealing fairly and efficiently with their policyholders,” he said. “The calls that we’re seeing, the largest number, are in delays getting claims resolved.”
Lawmakers seemed reassured about the health of a crucial industry under pressure. Assemblyman Gary Schaer (D-36) serves as the Chairman of the Assembly’s Financial Institutions and Insurance Committee. “What I think we’re learning from New Jersey Manufactures, from Allstate, is that financially they are in good shape, they are certainly able to weather the storm, so to speak,” he said.
Several lawmakers made the point that in a well-educated state like New Jersey, very few actually know what’s in our insurance policies. The lights are back on. Maybe it’s time to read that fine print.