Commissioner Badolato Urges Homeowners to Review Insurance Risks

TRENTON – (RealEstateRama) — Department of Banking and Insurance Commissioner Richard J. Badolato today highlighted the importance of a new nationwide survey demonstrating the need for New Jersey homeowners to review their homeowners insurance policies in consideration of natural disaster threats. According to a new survey by the National Association of Insurance Commissioners (NAIC), fewer than 22 percent of homeowners view natural disasters as an important factor when updating their homeowners insurance policy.

More than 800 emergency or disaster declarations were made in the United States from 2005-2015, resulting in an average of $24 billion in annual insured losses due to natural catastrophes, according to the Federal Emergency Management Agency (FEMA) and the Insurance Information Institute. However, the NAIC survey revealed 56 percent of homeowners have not reviewed their insurance policies in more than a year and 14 percent are unsure when – if ever –they last reviewed their policies.

“As New Jersey residents, we’ve experienced significant losses from Superstorm Sandy, Hurricane Irene and other emergencies,” said Commissioner Badolato. “Consumers need to reconsider the risks disasters pose within our region and how it impacts their home insurance needs.”

Generational Differences

NAIC’s survey also shed light on generational differences to approaching home insurance. Compared to Gen Xers and baby boomers, millennials are more likely to have reviewed or updated their insurance policy within the last five years. Millennials also are more likely to have a home inventory and to have reviewed or revised it within the last five years.

Before the Storm

Consumers should re-evaluate their risk profile at least once a year to ensure their homeowners policy provides the protection they need. Questions to consider include:

• Am I now at risk? Are earthquakes, wildfires, hurricanes and floods now a threat? Do I have enough coverage for these events? Do I need a flood insurance policy?
• What has changed in my home? Did the number of people (and belongings) increase or decrease? Have I made any major purchases?
• Am I covered if valuable pieces of jewelry or fine art are lost or broken?
• Have I updated my home with a kitchen renovation, new security system or other improvements?
• Should I be looking at different coverage?
• If my home is damaged by a covered loss does my policy provide actual cash value or replacement reimbursement?

The NAIC survey is found here: www.insureuonline.org/disaster_prep_survey_exec_summary.pdf

New Disaster Prep Guides from the NAIC: www.insureuonline.org/insureu_special_disaster.htm

This information can help consumers determine the best course of action before, during and after a disaster strikes. These resources include guidance and tips for various disaster risks.

More Information

For more information, call the Department’s Consumer Assistance line: 1-800-446-7467 or go to: www.state.nj.us/dobi/division_consumers/index.htm

For Further Information:
Marshall McKnight (609) 292-5064