Senator PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
Prohibits use of anti-concurrent causation clauses in homeowners insurance policies.
CURRENT VERSION OF TEXT
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. As used in this act:
“Commissioner” means the Commissioner of Banking and Insurance.
“Homeowners insurance” means “homeowners insurance” as defined by section 1 of P.L.2009, c.409 (C.17:36-5.33).
2. An insurer authorized to transact the business of homeowners insurance in this State shall not exclude coverage in a homeowners insurance policy for loss or damage caused by a peril insured against under the terms of the policy on the grounds that the loss or damage occurred concurrently or in any sequence with a peril not insured against under the terms of the policy. Any such provision to exclude coverage shall be void and unenforceable.
3. This act shall take effect on the 90th day following enactment and shall apply to any homeowners insurance policy, delivered, issued, renewed, or approved on or after the effective date.
This bill prohibits the use of “anti-concurrent causation” clauses in homeowners insurance policies issued in the State. Currently, homeowners insurance companies are allowed to use these clauses in their policies with the result that, in situations in which a covered cause of loss or damage occurs concurrently or in any sequence with a non-covered cause of loss or damage, coverage for the entire loss or damage can be excluded and claims can be denied. This bill would end that practice by prohibiting the use of anti-concurrent causation clauses in homeowners insurance policies and providing that any such provision to exclude coverage shall be void and unenforceable. Homeowner insurance coverage controversies tend to arise with respect to anti-concurrent causation clauses in connection with water and wind damage from hurricanes and other extreme weather events.