Homeowners insurance claims targeted by state regulators
Regulators in New York are pressing hard against the insurance industry in the wake of Hurricane Sandy. The storm caused havoc throughout the state, leaving many properties damaged by widespread floods and strong winds. In the months that followed, victims of Hurricane Sandy struggled with their homeowners insurance providers in order to get their claims processed and receive the money they need to recover. Insurers, however, have been sluggish in handling these claims, leading state regulators to take more action for the sake of the recovery effort.
Regulators introduce new rules throughout the state
This week, regulators will be introducing new rules to the state’s insurance industry in order to expedite the resolution of claims relating to Hurricane Sandy. These new rules will reduce the amount of time insurers can delay their decision concerning homeowners insurance claims. Insurers will also be forced to report to the Department of Financial Services on a weekly basis regarding the issue of why some claims are being delayed while others are being resolved relatively quickly.
Unresolved claims delay recovery for consumers
Governor Andrew Cuomo, who has been very critical of the homeowners insurance sector in the months following Hurricane Sandy, notes that many of the claims in areas affected by the powerful storm have been closed, but tens of thousands remain open and unresolved. The Governor suggests that delays in resolving these homeowners insurance claims have put significant financial stress on the state’s residents and inhibited the recovery process throughout the state. State officials are eager to understand why many claims remain unresolved, and whether insurers have plans to resolve these claims in the near future.
Flood insurance not included under new rules
While regulators are showing earnest action concerning homeowners insurance claims, the new rules that are being instituted have no bearing and flood insurance claims. Flood insurance is strictly within the jurisdiction of the federal government, as most homeowners receive their flood insurance coverage through the National Flood Insurance Program (NFIP), which is overseen by the Federal Emergency Management Agency. Most of the damage caused by Hurricane Sandy came from floods, and the federal flood insurance program has struggled to manage the claims coming from policyholders in the months following the storm.