Insurers would be required to spell out policy coverage
By Paula Katinas
Brooklyn Daily Eagle
Insurance companies would be mandated to spell out – in plain English, not bureaucratic double talk – the details of policy coverage in the event of a natural disaster if a bill recently passed by the State Assembly becomes law.
Assemblyman Joseph R. Lentol (D-Greenpoint-Williamsburg) is one of the assembly members who supported a bill to create a Homeowners Bill of Rights.
The Homeowners Bill of Rights would require insurers to provide homeowners with a disclosure notice detailing their property and casualty coverage in the event of a disaster. Specifically, the disclosure notice would include information on coverage or limitations on coverage for certain catastrophic losses; claims investigations and proceedings; the rights of the insured under the law; provisions that could be modified or changed in accordance with the law following a disaster; and any other information deemed necessary by the New York State Superintendent of Financial Services.
“Every homeowner has the right to know what kind of insurance they have and what kind of coverage they might need if a natural disaster strikes, especially in the area of North Brooklyn which is surrounded by water,” Lentol said. “Unfortunately, many homeowners are not fully informed about the details of their coverage, leaving them unprepared for potential catastrophic damage to their homes. The Assembly’s legislation would require insurance companies to provide consumers with easy-to-understand notices so they are better prepared."
The insurance nightmare that many homeowners experienced after Superstorm Sandy influenced many assembly members to support the idea of a bill of rights.
One year after Superstorm Sandy devastated several neighborhoods of New York City, the New York Daily News conducted an assessment of the plight of homeowners and reported that many homeowners were fighting with their insurance companies. Nearly one in five of the 404,000 claims submitted by New Yorkers for Sandy damage were rejected, the Daily News reported.
“Following recent disasters like Superstorm Sandy and Hurricanes Irene and Lee, many homeowners have been shocked to find their insurance claims denied or their settlements substantially less than the cost of the damages to their homes,” Lentol said. “In times of crisis, when assistance is needed most, no one should be denied the coverage they thought they had because of information on their policy.”
If a homeowner’s policy does not include coverage for certain catastrophic losses, the insurer would be required to provide the policy holder with information pertaining to other available coverage options, under the provisions of the Homeowners Bill of Rights.
The legislation would also require the disclosure of a consumer’s flood zone and direct the New York State Department of Financial Services to develop a Consumer Guide on Insuring Against Catastrophic Loss.