Assembly Speaker Sheldon Silver and Insurance Committee Chair Kevin Cahill joined with colleagues to announce the Assembly's passage of an expansive legislative package that would help reform the arduous recovery and rebuilding process in the wake of widespread damages caused by Hurricane Sandy. The bills would establish a Homeowner's Bill of Rights, reform the insurance process to make it more timely and efficient and hold insurance companies to a higher standard of accountability.

"At a time when so many families and businesses are still struggling to rebuild from Sandy, I hear far too often about the painstaking, complex processes so many people have had to go through to even get their insurance companies on the phone, let alone begin filing claims or receiving any actual assistance," Silver said. "Community members should be able to focus on recovery without the additional burden of dealing with unresponsive, unreliable or overwhelmed insurance companies. This legislative package reforms multiple aspects of the lengthy insurance process, but most importantly, it ensures that insurance companies are accountable to the homeowners and businesses they represent."

Establishing a Homeowners Bill of Rights

Victims of Hurricane Sandy, Hurricane Irene and Tropical Storm Lee quickly became aware of just how complicated the insurance claims process can be. To bring greater clarity and ensure policyholders know just what they are entitled to from their insurance company, the first bill in the Sandy Insurance Reform legislative package creates a Homeowner's Bill of Rights (A.2287-A/Silver). This comprehensive initiative would educate consumers about property and casualty insurance coverage, provide them with easy-to-understand disclosure notices detailing their coverage in the event of a disaster, identify whether or not they reside in a flood zone and require the Department of Financial Services (DFS) to establish a Consumer's Guide on Insuring Against Catastrophic Loss.

Silver said, "Both homeowners and business owners have a right to know the kind of coverage options available to them in the event of a natural disaster, plain and simple. This helps them prepare ahead of time and could potentially mitigate the after-effects of a dangerous storm."

Increasing Clarity, Ensuring Efficiency in Insurance Coverage Response

To help streamline the often complex standards and processes that can potentially come along with filing insurance claims, the Sandy Insurance Reform package includes bills that would:

• ensure that DFS establishes standards for hurricane windstorm deductibles in order to create uniformity in their operations with respect to the triggering storm (A.2729/Weisenberg);
• standardize the definitions of terms and phrases commonly used in homeowners and certain commercial insurance policies (A.7453/Cahill); and
• require insurers, agents and brokers to provide potential customers with copies of homeowners and certain commercial insurance policies prior to the policy being purchased (A.7454/Cahill).

Cahill said, "These measures can't prevent the next superstorms from reaching New York's shores but they can help ensure that homeowners and business owners will be protected in the aftermath from unfair insurance practices. I'm pleased that my Assembly colleagues recognized the importance of this package today and voted to make it law. I will continue this important work to make certain that policyholders are covered and informed."

Assemblyman Harvey Weisenberg said, "In April of 2012, the Assembly overwhelmingly approved my bill, yet the Senate failed to act. At that time, I cautioned that we could not afford another hurricane season without basic standards and guidelines for the underwriting of windstorm policies. Six months later, Sandy visited our shores. The passage of this bill would have prevented at least one confusing obstacle so many homeowners faced during our attempts to rebuild."

Keeping Insurance Companies Accountable and Providing Consumer Protection

The legislative package also works to better ensure that insurance companies are held accountable to the families and businesses they serve in the event of a natural disaster, including a measure that would establish requirements for insurers to investigate disaster claims and require that they accept or reject potential claims within 15 business days of concluding the investigation (A.1092-A/Skoufis). This bill is designed to lay out specific claim investigation and settlement standards to ensure timely responses, investigations and settlements from insurance companies.

Assemblyman James Skoufis said, "When Hurricane Irene hit our community in 2011, many families and businesses were destroyed and left waiting, held in limbo for months on end by the same insurance companies that were supposed to be helping them rebuild. And when Sandy hit, many communities in New York were left feeling the same way - abandoned and forgotten by their insurance companies. This legislation amends that unjustifiable problem and ensures that insurance companies respond to claims in a timely and efficient manner."

Legislation in the Sandy Insurance Reform package also would:

• establish an expedited process for lawsuits against insurance companies that stem from a declared disaster or emergency (A.5570/Titone); and
• create a private right of action for unfair claim settlement practices when the claim arises from a declared disaster or emergency (A.5780/Weinstein).

Assemblyman Matthew Titone said, "Many families and business property owners have sustained massive financial ruin in the wake of our state's recent natural disasters and have been left waiting for months, and even years, before receiving assistance from insurance companies. Such a lengthy wait is unacceptable. The bill I sponsored will help affected parties seek an immediate and definite resolution of their claims against unresponsive insurers in court."

Assemblywoman Helene Weinstein said, "While insurers have the right to reasonably deny a consumer's insurance claims, oftentimes they end up taking advantage of businesses or homeowners who have lost everything. We saw this just last year with Hurricane Sandy when many homeowners were placed in unrealistic situations by their insurers after simply trying to claim benefits they were entitled to. The legislation I sponsored amends this wrongdoing and will help ensure that those who are entitled to certain insurance benefits as a result of devastating storm damage receive them and are treated fairly by their insurance companies."

Increasing the amount of consumer protection provided both during a natural disaster and moving forward was a top priority for many of the legislative sponsors in this expansive insurance reform agenda. A number of the measures provide protections that would:

• restrict the number of homeowners policies an insurance company can decide not to renew to four percent of each rating area while also permanently granting the New York Property Insurance Underwriting Association (NYPIUA) the authority to expand into additional markets (A.6913/Sweeney);
• prohibit an insurer from refusing to pay for damages caused by a covered event solely because a flood occurred simultaneously with or was a contributing factor in the covered event, and mandate that insurers who include anti-concurrent causation clauses in their policies clearly state in what situations those clauses would apply (A.7455-A/Goldfeder); and
• prohibit insurers from denying business interruption claims (ex: a result of power outages or some other barrier) for losses that are covered under the policy because those losses were caused by something that is excluded from coverage currently, such as flooding (A.7452-A/Moya).

Assemblyman Robert Sweeney said, "Following a major disaster such as Superstorm Sandy, insurers often withdraw from the coastal markets, placing large numbers of homeowners on the market at one time. This not only disrupts the market, but places a strain on policyholders, many of whom are still recovering from the disaster. Under current law, an insurance company can drop homeowners in an entire region, causing policy costs to skyrocket for those who are lucky enough to be able to obtain replacement coverage. This is poor policy and must be changed."

Assemblyman Phillip Goldfeder said, "In the destructive aftermath of Sandy, many homeowners were shocked when their insurance companies denied claims for damages that should have been covered under their insurance policies simply because these damages occurred simultaneously with an event such as severe flooding, which is excluded under the majority of homeowner policies. This left far too many families without appropriate insurance coverage at a time when they so desperately needed the help. My legislation would prohibit the denial of these types of claims when the damages occur at the same time as a flood to help make sure victims of flooding receive the assistance they need for damages and circumstances far beyond their control. My bill would also require insurers to clearly outline in the policy when they would deny coverage in such situations and to disclose this information to the consumer, keeping transparency and accountability on the behalf of the insurance company a top priority."

Assemblyman Francisco Moya said, "When Hurricane Sandy hit our region, countless businesses experienced severe damage and a subsequent loss of productivity due to power outages and other storm-related destruction, but were frustratingly denied claims by insurers, who noted the damages were often caused - however indirectly - by flooding, a stipulation normally excluded from business interruption coverage. This is unacceptable and entirely unfair, which is why the bill I sponsored gives these businesses a right to pursue claims on relevant natural disaster-related damages and helps alleviate some of the burden of their storm-recovery efforts."

Preparing for Future Disasters

The legislative package also includes several initiatives that would provide for more awareness on behalf of families, insurance companies and businesses in an effort to mitigate damage and destruction from future natural disasters. One of these measures would provide appropriately determined discounts on fire and homeowners insurance after completion of a residential home safety and loss prevention course approved by the DFS (A.1475-A/Colton). These courses would be required to include information on preventing losses caused by weather-related occurrences and similar events.

Assemblyman William Colton said, "This legislation provides homeowners with the opportunity to not only stay better informed, but also lower their potential financial burden in the event of a future hurricane, flood or other natural disaster. This will also lower costs and possibly lighten the caseload for many insurance companies, which will allow them to better focus their attention on those most in need of assistance."

In addition, to ensure better preparation and responses are in place for future natural disasters, the legislation includes measures that would:

• require the DFS to - following a declared disaster - prepare a report card with detailed information on how property/casualty insurers responded to the disaster (A.7456/Brook-Krasny). Such report cards would allow insurance companies to see where improvements could be made in the timeliness of responding to claims by both businesses and homeowners; and
• establish a task force comprised of the DFS, the Division of Homeland Security and Emergency Services, insurance industry representatives, local disaster response officials, adjusters and consumer groups to examine how insurers respond to disasters (A.1093/Skoufis). The task force would also help determine what ways these and other local agencies can better assist businesses and homeowners in connecting with insurance companies and also address what steps disaster response officials can take to ensure effective and efficient responses in the event of future natural disasters.

Assemblyman Alec Brook-Krasny said, "When a natural disaster hits, insurance companies should be doing everything in their power to help cut down on the already lengthy and complicated recovery processes for businesses and homeowners. The transparency of a DFS-issued report card will help the public, not to mention the insurance industry and legislative officials, determine just how well the insurance companies are doing in their response to disaster claims and what they can do in the future to improve their actions."

To further prepare for potential hurricanes or other natural disasters, an initiative passed during the Assembly's recognition of Legislative Disabilities Awareness Day would require counties to maintain confidential registries of people of all ages with disabilities who may need evacuation assistance and shelter during a disaster situation. Provisions in the bill would make inclusion on the list voluntary (A.6432/Cusick).

Assemblyman Michael Cusick said, "When a natural disaster strikes, we need to make sure that every person is kept safe and accounted for, especially individuals living with disabilities. Having a plan in place provides protection and ensures that evacuation routes are accessible for every resident in a high-rise building."