From Insurance Journal today:
House Bill 982 requires agents to inform buyers of the difference between flood and homeowner’s insurance policies. The customer would then sign a form acknowledging their understanding. The bill passed 101-17 and heads to the Senate.
“If we had done this last February, we could have saved people a lot of headaches,” Formby said.
Senate Bill 2014 is similar and adds the disclosure that contents coverage may be available with the flood policy for an additional premium.
You know, I’ve only bought homeowners insurance once (when we bought our house), and renters insurance thrice. I’m 100% certain that the “flood is not covered” spiel was included in my purchasing process in acquiring HO coverage, and I’m pretty sure I encountered it when getting my renters coverage.
I think that getting the signature is one way to ensure that the agent has advised that flood is/isn’t covered in the coverage that’s being bought. However, considering the mountains of paperwork seemingly involved, and normal people’s tendency for their eyes to glaze over within a few seconds of talking insurance, I wonder if the extra disclosure will actually change anything.
Well, token improvements are, I guess, better than no improvements.
1 response so far ↓
1 Mike The Actuary’s Musings » MS Congressman Wants Disaster Insurance // 25 Jan 2006 at 11:30 am
[...] Personally, I like the approach I wrote about earlier better. The private sector mechanism already exists; however the private sector has all-too-frequently sucked when it comes to educating the public about insurance matters. And, the reports of insurers waving off wind damage as water damage are skeezy and and the practice should be stopped…if the reports are indeed true. (I can imagine it happening; I can also imagine upset homeowners not really understanding what they’re being told by the adjusters and insurers.) [...]