Hurricane Sandy causes widespread confusion
The impact of Hurricane Sandy continues to be felt despite the storm having made landfall and dissipating several months ago. A New Jersey State Assembly committee met late last week to address yet another issue that has arisen in the wake of Hurricane Sandy. Over the past few months, lawmakers and citizens alike have been working to overcome problems with insurance coverage, claims, and the damage caused by widespread flooding. Now, however, state officials must combat the growing confusion that Hurricane Sandy has generated, which is threatening to incite chaos in New Jersey.
Lawmakers looking into the merits of new legislation to fight confusion among consumers
A special financial institutions and insurance committee has been established by the state in order to analyze the prospects of a new legislation that would require insurance companies to provide consumers with concise summaries of a policy’s key features. Because most insurance policies are written using very convoluted language, they can be very confusing for policyholders that do not have experience in law and business. This has lead to significant problems, as well as conflict, between insurance companies and consumers.
Convoluted policies leave consumers befuddled
This confusion is threatening to put a serious delay on claims related to Hurricane Sandy. Lawmakers are eager to see insurance companies adopt a practice that would make their policies more easily understood by consumers without introducing any undue risk to an insurance business itself. The reason policies are often worded in a very complex manner is to ensure that the insurer is covering its basis in terms of law and liability. While the wording of a policy may be confusing to a consumer, it is much less so to a lawyer or a judge, who may be in a position to determine the validity of claims.
Legislators may force insurers to be more concise
In the weeks following Hurricane Sandy, homeowners found that the damage to their homes was not actually covered by their insurance policies. This is because much of this damage was the result of flooding. New Jersey insurers, just like those in other states near coastal regions, do not offer coverage for flood damage because floods are somewhat common in these regions.