After the devastation and long recovery period following recent natural disasters, Assemblyman Fred W. Thiele, Jr. (I, D, WF-Sag Harbor) announced the Assembly passed a package of bills aimed at establishing key insurance reforms to better prepare home and business owners in the future. The package includes measures that would establish a Homeowners Bill of Rights, streamline insurance claims, crack down on negligent insurance companies and improve consumer awareness about insurance coverage.

“In recent years, we’ve seen how natural disasters can turn a community upside down, displacing families from their homes and businesses and destroying everything they own,” Assemblyman Thiele said. “This legislative package addresses several issues victims of recent natural disasters experienced. While it’s impossible to pinpoint when the next disaster will strike, we can do our part to help families be better prepared and make sure insurance companies do their jobs when consumers need them the most.”

Establishing the Homeowners Bill of Rights

The Assembly passed legislation that would create a Homeowners Bill of Rights to educate consumers about property and casualty insurance coverage, providing them with an easy-to-understand disclosure notice detailing their coverage in the event of a disaster (A.2287-A). This measure would also require disclosure of a consumer’s flood zone, and require the state Department of Financial Services (DFS) to develop a Consumer’s Guide on Insuring Against Catastrophic Loss.

“Right now, many homeowners aren’t fully aware of what’s included in their insurance coverage, leaving many vulnerable and potentially unprepared in the event of a disaster,” Thiele said. “Everyone has the right to know what coverage they actually have and what coverage they need if a natural disaster wreaks havoc on their home. This measure will help better educate consumers so they know exactly what they are purchasing.”

Improving consumer awareness and transparency of insurance coverage

The legislative package includes a measure that would require DFS to establish standards for hurricane windstorm deductibles to help clarify which circumstances the insurance coverage applies to (A.2729).

“Often times, determining deductibles or specific terms for insurance coverage can be a confusing process,” Assemblyman Thiele said. “By clearing up the legal jargon and gaining a greater knowledge and understanding on policies from insurance companies, we can help make sure families find policies that best fit their homeownership needs and make sure they are covered in case of an emergency.”

The Assembly package also includes legislation that would:

• establish clear definitions for terms and phrases commonly used in homeowners and certain commercial insurance policies (A.7453);
• require that insurers, agents, and brokers provide potential customers with copies of homeowners and certain commercial insurance policies before the policy is purchased (A.7454); and
• provide discounts on fire and homeowners insurance after completion of a residential home safety and loss prevention course approved by DFS; such courses would be required to include information on preventing losses caused by weather-related events (A.1475-A).

“These measures would make sure insurance companies are more accountable to consumers and provide quality assistance,” Thiele said.

Streamlining insurance claims

Assemblyman Thiele is backing another piece of legislation that would establish claim and settlement standards for insurance companies to follow when a disaster strikes (A.1092-A). This measure would tighten the timeframe requirements for insurers to respond to claims resulting from disasters and emergencies. Within 15 business days after receiving all the items, statements, and forms from the property owner, the insurer would be required to advise them in writing whether or not their claim has been accepted or rejected. An insurer would be allowed a one-time extension of 15 additional business days to continue their investigation, provided that the insurer notifies the property owner of the reasons additional time is needed. If a claim has been accepted, insurers are required to pay it within three business days.

“In the event of a disaster, insurance policies are many victims’ only lifeline to start the rebuilding process,” Assemblyman Thiele said. “Without a timely response from their insurance company, families are unable to move forward and are completely vulnerable. This legislation would speed up the recovery time and make sure insurance companies are responsive to the needs of New Yorkers.”

Cracking down on insurance companies

In an effort to stop insurance companies from unfairly taking advantage of policy holders, the Assembly passed a measure that would expedite the process for lawsuits filed against insurance companies that stem from unsolved claims from damage to a property during a declared disaster or emergency (A.5570).

“Unfortunately, for many victims of natural disasters who lost everything, unsettled insurance claims can send many into financial ruin,” Assemblyman Thiele said. “There is no reason victims should have to wait years for their claims to be settled. Insurance companies must be held accountable for claims that have gone unanswered, and this legislation would ensure that victims can take immediate action against insurance companies to help them move on with their lives.”

The Assembly also passed a measure that would allow policy holders to take direct action for unfair claim settlement practices when the claim arises from a declared disaster or emergency, making sure insurers are held responsible for unfair claims practices (A.5780).

Protecting home and business owners, increasing accountability

In an effort to help protect home and business owners and make sure insurance policies cover the damage incurred, the Assembly passed legislation that would:

• stop insurance companies from denying business interruption claims for losses that are covered under the policy because those losses were caused by something that is excluded from coverage (A.7452-A); and
• prohibit an insurance company from denying a claim that would normally be covered under the policy solely because a separate flood occurred at the same time or contributed to the loss, but was not covered or was specifically excluded (A.7455-A).

“In the aftermath of Superstorm Sandy, many homeowners were left completely unprepared when insurance companies denied their claims because of loopholes in their coverage,” Thiele said. “This unfair practice has left homeowners without adequate insurance coverage at a time when they needed it the most. The Assembly’s legislation will help close these loopholes and make sure that homeowners aren’t left in the dark and taken advantage of by insurance companies.”

Finally, the Assembly passed measures to help improve insurance coverage and hold insurance companies more accountable in the future. The measures would:

• require DFS to prepare a report card with detailed information on property/casualty insurers responses following a declared disaster (A.7456);
• limit the number of homeowners policies an insurance company can deny renewal and permanently grant the New York Property Insurance Underwriting Association the authority to expand into additional markets (A.6913); and
• create a task force comprised of the state DFS, 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).

“What so many New Yorkers were forced to experience after recent natural disasters must not happen again,” Assemblyman Thiele said. “The Assembly’s insurance reform package would hold insurance companies accountable and ensure that homeowners have the insurance coverage they need to prepare for the future.”