Sponsored by:
Senator BOB SMITH
District 17 (Middlesex and Somerset)
Senator JOHN F. MCKEON
District 27 (Essex and Passaic)
SYNOPSIS
Creates Joint Blue Ribbon Task Force on Impacts of Climate Change on Property Insurance.
CURRENT VERSION OF TEXT
As reported by the Senate Environment and Energy Committee on December 11, 2025, with amendments.
An Act creating a task force on the impact of climate change on property insurance.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares:
a. A changing climate presents the State with more frequent risks, such as sunny day flooding, 1heat waves,1 and more extreme risks, including wildfires 1, winds, storm surges,1 and 1compound flooding from1 intensive storms;
b. 1[Rapid sea] Sea1 level rise is going to make some coastal communities not only uninsurable due to increasingly consistent flooding, but 1[uninhabitable] also uneconomic and unsafe for continued habitation1;
c. From 2018 to 1[2023] 20221 , the rate at which insurers dropped 1homeowners1 property insurance policies 1in the State1 jumped 69.54 percent from 0.47 percent to 0.8 percent 1[, putting New Jersey in the same quintile as Florida and California, states increasingly ravaged by disasters]1 ;
d. Property owners want insurance that is affordable and available, 1and research has demonstrated that insured households have improved recoveries,1 but 1[in risk-exposed places, this combination of incentives can produce three bad outcomes, those outcomes being moral hazard, low-quality insurance coverage, and a lack of investment in risk mitigation and preparation] underpricing in high-risk areas can further drive insurers from the market, lead to low-quality coverage, and create perverse incentives for underinvestment in risk reduction1.
e. It is both reasonable and necessary for the State to enable, facilitate, support, and safeguard the provision of 1[high quality] high-quality1, comprehensive property insurance to home and commercial property owners.
2. a. There is created in, but not of, the Department of Banking and Insurance, the Joint Blue Ribbon Task Force on Impacts of Climate Change on Property Insurance. The task force shall be comprised of 1[13] 171 members as follows:
(1) the Commissioners of Banking and Insurance, Community Affairs, and Environmental Protection, or their designees, serving ex officio;
(2) two members of the Senate, who shall not be of the same political party, appointed by the President of the Senate;
(3) two members of the General Assembly, who shall not be of the same political party, appointed by the Speaker of the General Assembly;
(4) 1[three] five1 members shall be representatives from the private sector, specifically from an insurance association, an insurer, a reinsurer, a real estate representative, 1[or] and1 a business representative, appointed by the Governor with the advice and consent of the Senate; 1[and]1
(5) three members from nonprofit entities, specifically a representative from a consumer advocacy group, 1a1 planning advocacy entity, and 1an1 environmental advocacy entity, appointed by the Governor with the advice and consent of the Senate 1; and
(6) two members from academic institutions with expertise in climate change and insurance, appointed by the Governor with the advice and consent of the Senate1.
b. The Departments of Banking and Insurance, Community Affairs, and Environmental Protection shall provide staff support to the task force, and the task force shall be entitled to call to its assistance other State department employees as necessary.
c. The purpose of the task force shall be to assess the current and predicted impacts of climate change on residential and commercial property insurance by analyzing:
(1) how the State 1, federal programs such as the National Flood Insurance Program,1 and the insurance industry may be subsidizing risky decision-making, keeping or putting people 1and property1 in harm’s way;
(2) in which places does the price of insurance not reflect the risk that a property faces;
(3) in which communities properties are or will be uninsurable at a reasonable cost 1in the next 50 years1 because of everyday risks such as tidal flooding or 1[tail risks] high-severity, low-frequency events1 such as 1[a disaster] disasters1;
(4) how the State will ensure 1[homeowners]1 access to 1residential and commercial1 property insurance without subsidizing 1or enabling1 dangerous or impractical location choices;
(5) how changes in the insurance market 1and underlying physical risks, such as flooding,1 may impact a municipality's current affordable housing inventory and its ability to meet its affordable housing requirements;
(6) given potential changes at the federal level impacting the availability of climate data, which alternative sources of information may be available in the future 1, and how changes in the availability of that information may impact the competition among insurers and the ability of New Jersey communities to prepare and plan for longer-term insurability1;
1(7) how changes in the affordability and availability of property insurance will impact real estate value;
(8) the displacement and segregation impacts on communities in New Jersey, especially on those with low and moderate incomes;1 and
1[(7)] (9)1 any other issues or concerns that the task force deems relevant and appropriate.
d. Not later than one year following the appointment of all task force members, the task force shall submit to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a report containing a study and evaluation of its findings and recommendations. The report shall include, but not be limited to, a description of any present or potential concerns related to the impact of climate change on property insurance and whether existing State or federal law or practices adequately address those concerns, and any recommendations to address inadequacies in those laws or practices. The task force shall expire upon submission of the report.
3. This act shall take effect immediately.