TRENTON – Gov. Chris Christie has signed an executive order prohibiting insurance companies from imposing costly hurricane deductibles on New Jersey homeowners in the wake of Hurricane Sandy.
“We need to ensure that homeowners are not forced to pay higher out of pocket costs than required as they begin the rebuilding and repair process,” Christie said in a release announcing the order.
This action will help to increase the total amount of payments made by the insurance industry, Christie said in the release, and help residents rebuild.
The state offered one example:
A hurricane deductible typically can be in the amount of two to five percent of a property’s insured value. Thus a $500,000 house with a four percent hurricane deductible would result in a homeowner being responsible for a $20,000 deductible, rather than a more standard deductible in the $500-2,000 range.
Insurers are permitted to charge hurricane deductibles in certain circumstances. However, as the National Weather Service classified Hurricane Sandy as a post-tropical storm prior to landfall in New Jersey, the storm did not meet the first regulatory threshold required to apply a hurricane deductible, the governor point out.