New York Legislature Considers "Homeowner's Bill Of Rights" In Response To Experiences From Super-Storm Sandy
In response to policyholders’ experiences after Super-storm Sandy, New York lawmakers are considering legislation that would create a Homeowner’s Bill of Rights (A-2287), which would require insurers to provide property owners with an easy-to-understand disclosure detailing their coverage in the event of a catastrophic occurrence; how and when to file a claim; their rights if a claim is denied or a settlement offer is insufficient; and where and how to obtain coverage for catastrophic events. No matter which side of the political fence you are on, the proposed bill has some good features.
The proposed bill would also direct the Superintendent of Financial Services to create a Consumer Guide on Insuring against Catastrophic Losses and require insurance companies to inform property owners where they can obtain the Guide so they can be better educated and understand their rights.
The proponent of the proposed bill stated:
Almost 85 percent of my district including my own home and office were destroyed by Sandy and it is unacceptable that beleaguered home and business owners are stuck in limbo, unable to rebuild pending action by insurance companies. It is our sincere hope that these measures will create more informed insurance consumers and hasten recovery for communities like the ones in Southern Queens and Rockaway.
The New York Legislature is considering a second bill by the same proponent (A-1092), which would require insurance companies to promptly process claims resulting from storm damage. It would require insurance carriers to begin investigating these claims within six (6) days, and notify policyholders within fifteen (15) days as to whether their claim has been accepted or rejected, including their right to appeal if the claim has been rejected. Under this bill, if the claim is accepted, insurance carriers would be required to pay within three (3) business days. In the words of the proponent of this bill:
It has been over two months since Sandy ripped through our community and while rate paying residents have been working hard to pick up the pieces and rebuild, it seems that insurers are not doing their part. We should not have to wait weeks, months or years for an insurance company to process, approve, and pay for claims that will help rebuild our homes, businesses and lives.
I am sure policyholders who are still awaiting decisions from Super-Storm Sandy claims could not agree more. What are your thoughts?
As I begin my 40th year in the claims handling business it still amazes me how little politicians appreciate the intricacies of dealing with catastrophes. Legislating rules is the easy part compliance less so. Where do they expect the necessary personnel and attendant cost to come from? Finding qualified Cat adjusters is difficult at the best of times. Imposing more stringent requirements isn't the solution. Educating consumers on their obligations is necessary. Granted insurance policies aren't the easiest documents to understand and could be made more consumer friendly but would that result in more folks buying appropriate coverage. With society's more prevalent penchant for blaming everyone else for their misfortune with the resources available today there is less and less of an excuse for ignorance of insurance requirements. Why would only 17% of coastal residents have flood insurance? If only they could legislate against complacency the problems surrounding this storm might be less.
With all due respect to the good intentions of the public officials who are proposing these reforms, they won't solve the real problems - if anything, mandating disclosures make the post-disaster problems worse b/c they give insurers a liability shield to hide behind, and they rarely give the consumer the real scoop on all the nit picky exclusions, complicated depreciation math and gaps in coverage that are the real cause of the aggravation. And as for mandating 6 days - that's fine for a required cash advance for things like ALE, contents replacement and repairs/mitigation. But shorter payment deadlines tend to lead to lowballing - any amount of money looks good to most traumatized disaster survivors in the early days after their loss...
Dear Insurance Veteran:
You're a frequent commenter and - obviously - a knowledgeable company man for the insurer.
re: Your comment:
..Educating consumers on their obligations is necessary..
I've seen so many cases where the consumer relies on an Insurance Agent to help them in obtaining the proper ins. coverage and educate them on their "obligations," but the ins. agent fails to do so.
SHIRLEY HEFLIN
(Tampa, FL)
Shirley I have been an independent adjuster for 95% of my career and have always strongly advocated for the insured. I firmly beleive in securing all the indemnity available for a covered loss. I will concede that brokers and agents don't always do a stellar job of providing the appropriate coverage and frequently find myself the bearer of bad news as a result of their omissions, however with all the resources available to the consumer today neglecting to secure flood coverage in a coastal area verges on willful omission. We make educated purchases for appliances, cars and other commodities ,insurance is no different. The consumer needs to wise up and assume some responsibility instead of expecting the government to bail them out. The blame game doesn't really fly in this case.
Dear Insurance Veteran:
No doubt you're a well versed (i.e., genius) in your field. Didn't know you were an Independent Adjuster and, obviously, not a "company man"....I apologize for wrongly assuming same.
In any event, we could debate what consumers/insureds/laypeople should and shouldn't do forever, however, I'll concede that if one lives in a coastal/flood area that it's virtually commen sense to anyone - even a layperson- that they should get flood coverage.
I smiled after reading your last sentence, to wit:
THE BLAME GAME DOESN'T REALLY FLY IN THIS CASE
It brought to mind an on-line discussion I had on Yahoo post-Katrina when a "gentleman" called me a WHINING LIBERAL for sticking up for the people that didn't heed warnings to evacuate. He felt that they got what they deserved for being "stupid." It was a heated discussion and I didn't change his position and he didn't change mine. I was merely pointing out that not everyone has/had the $ to flee and relocate to another state, hotel...heck, some don't/didn't even have a car.
Well, Insurance Veteran, it's always nice chatting w/you. :)
SHIRLEY HEFLIN
(Tampa, FL)