Bill Text: NJ A4170 | 2014-2015 | Regular Session | Introduced
Bill Title: Prohibits homeowners insurance premium increase based on first claim during coverage period.
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2015-02-05 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A4170 Detail]
Download: New_Jersey-2014-A4170-Introduced.html
Sponsored by:
Assemblyman TIMOTHY J. EUSTACE
District 38 (Bergen and Passaic)
SYNOPSIS
Prohibits homeowners insurance premium increase based on first claim during coverage period.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning homeowners insurance and supplementing Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For the purpose of determining adverse claims experience and any related increase in premium, an insurer shall not consider or categorize as a claim the first claim filed under a policy of homeowners insurance during each coverage period.
b. An insurer which violates this act shall be subject to a penalty of up to $5,000 for each violation unless the insurer knew or reasonably should have known it was in violation of this act, in which case the penalty shall not be more than $25,000 for each violation. The penalty shall be collected in a summary proceeding in accordance with the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).
2. This act shall take effect immediately.
STATEMENT
This bill prohibits homeowners insurance premium increases based on one claim filed during the policy's coverage period. Specifically, the bill prohibits an insurer from considering or categorizing as a claim the first claim filed under a policy of homeowners insurance during each coverage period for the purpose of determining adverse claims experience and any related increase in premium.
An insurer found to have violated this prohibition shall be subject to a penalty of up to $5,000 for each violation unless the insurer knew or reasonably should have known it was in violation of the bill, in which case the penalty shall not be more than $25,000 for each violation.
According to reports in the press, one claim can raise the monthly homeowners insurance premium by as much as nine percent. This bill is intended to eliminate such rating and premium increases due to a single claim filed during any one coverage period.
