TRENTON – To prevent homeowners’ property insurance rates from spiking in the future due to the magnitude of such weather events like Superstorm Sandy, Assemblyman Peter Barnes (D-18) of Edison, said he would like to see a mandate where homes in flood-prone areas be required to have flood insurance.
“I think the time has come where New Jersey should really strongly consider requiring homeowners in flood zones to have flood insurance,” he said.
Barnes said it’s unfair that property owners who didn’t have flood insurance would get mostly the same benefits as those who shelled out thousands of dollars for flood insurance.
“Placing the risk where the risk should be placed is something we should strongly consider.”
Currently, Barnes said flood insurance is only required for those who have a mortgage. If the house has been paid off, they are not required to have that insurance.
He said the annual rates for such insurance are reasonable, costing some $650. Requiring such insurance would result in less haggling between property owners and insurance companies, and increases the likelihood that insurance carriers will remain “solvent.”
“Insurance companies would not be permitted under law to deny the coverage for flood or water damage like we’re seeing right now,” the assemblyman said.
At an Assembly Financial Institutions Committee hearing Thursday, flood insurance, and how relatively little it covers, was discussed.
Assembly Majority Leader Lou Greenwald (D-6) of Voorhees, said it is an example of what is “broken” with the property insurance system. To the surprise of some, such things as furnished basements are not covered by most flood insurance policies.