N.Y. State Legislators to Block Unjust Insurance Claims Denials

In Hurricane Sandy's wake, Empire State legislators are seeking to pass laws to prevent insurers from unjustly denying homeowners' damage claims during a state of emergency.

Last month, N.Y. Assemblywoman Nicole Malliotakis announced she’d drafted legislation to specifically define just what an unfair claims settlement practice is when there is a catastrophe. According to an article in the Insurance Journal, Malliotakis stated: “Poor communication, little action, and lack of urgency from insurance carriers are among the most stressful issues my constituents are facing in the aftermath of Hurricane Sandy.”

She also said: “It’s completely unreasonable for customers who have fulfilled their end of the bargain for years to be forced to deal with nonsense like unreturned phone calls and unjustified denials. Residents face a long road to recovery and certain insurance carriers have provided nothing but obstacles. It’s time they assumed their rightful role as part of the solution, rather than the problem. It’s time New York changed its laws to protect the consumer and not the insurance company.”

The sorts of things her legislation would ban include attempting to settle a claim using a document changed without the policyholder's knowledge. It also forbids insurers from making a “material misrepresentation” to settle a claim on less favorable terms than are listed in the policy.

Similarly, New York Assembly Speaker Sheldon Silver has sponsored a “Homeowners Bill of Rights” to force insurers to provide clients with a simple disclosure notice explaining their coverage terms when there is a catastrophe. This would, according to another Insurance Journal article, “protect hard hit families from unscrupulous actions by insurance companies.”

Hurricane Sandy is already beginning to result in lawsuits because of insurers’ alleged bad faith.

Has an insurance company acted in bad faith to you or a loved one and caused stress and suffering? If so, call Sokolove Law today to learn more about pursuing a bad faith lawsuit.

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