STATE OF NEW JERSEY
218th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2018 SESSION
Sponsored by:
Senator CHRIS A. BROWN
District 2 (Atlantic)
SYNOPSIS
Prohibits nonrenewal of homeowners insurance policies based on proximity to water or risk of windstorm related claims.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning homeowners insurance.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. No insurer authorized to transact property insurance in this State shall nonrenew any homeowner's insurance policy in this State, or issue any notice of nonrenewal of a homeowner's policy, on the basis of proximity to water or on the basis of risk of windstorm related claims. Every nonrenewal of a homeowner's policy shall be substantiated by underwriting rules which may be requested by the Commissioner of Banking and Insurance at any time with respect to the nonrenewal of a homeowner's policy.
2. An individual whose homeowner's insurance policy was not renewed on or after January 1, 2008, but before the effective date of this act, on the basis of proximity to water or on the basis of risk of windstorm related claims, and who was not subsequently insured in the voluntary market, shall be entitled to reapply to the insurer that refused to renew the policy, and no insurer shall refuse to issue to such an individual a homeowner's policy that includes the same coverage as had been included prior to nonrenewal.
3. The Commissioner of Banking and Insurance shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), promulgate regulations necessary to effectuate the purposes of this act.
4. This act shall take effect immediately.
STATEMENT
This bill prohibits the nonrenewal of a homeowner’s insurance policy on the basis of proximity to water or on the basis of risk of windstorm damage. The bill further provides that an individual whose homeowner's policy was not renewed on or after January 1, 2008, but before the effective date of this act, on the basis of proximity to water or on the basis of risk of windstorm related claims, and who was not subsequently insured in the voluntary market, shall be entitled to reapply to the insurer that refused to renew the policy, and no insurer shall refuse to issue to such an individual a homeowner's policy that includes the same coverage as had been included prior to nonrenewal.
In certain parts of the State, especially in the coastal region and other areas close to water, there has been an increase in the number of nonrenewed policies and nonrenewal notices. While in many cases, the homeowners are able to find alternative coverage in the surplus lines or residual market, it is often at much higher premium rates and with much less coverage. This bill would thus serve to stabilize the market by requiring insurers to maintain their current market share in those areas of the State.