State Questions Companies’ Response
Gov. Andrew M. Cuomo announced that the Department of Financial Services is investigating the claims practices of three insurers following the aftermath of Hurricane Sandy.
The three-Narragansett Bay Insurance Company, Tower Insurance Company and Kingstone Insurance Company-have had much higher than average complaints by consumers to the department.
The insurers are being investigated for their alleged (1) failure to send adjusters in a timely manner, (2) failure to process claims in a timely manner, and (3) inability of homeowners to contact insurance company representatives.
New York State has been tabulating the number of complaints against insurers and publishing updated report cards assessing insurance companies’ performance in responding to the disaster and paying claims at www.NYInsure.ny.gov.
“It is essential that people whose homes were damaged or destroyed by [Hurricane] Sandy receive insurance they are eligible for as quickly as possible so they can return to their homes and begin rebuilding,” Cuomo said. “We have been working with the insurance industry to streamline the rules and thank the companies who have responded. But we won’t tolerate insurers not doing what homeowners paid them to do- respond quickly in a disaster.”
Benjamin M. Lawsky, superintendent of financial services, added, “These practices and the volume of complaints on outstanding claims are totally unacceptable. New York policy holders have paid their premiums and have every right to expect a timely processing of their claims so that they can rebuild their homes and businesses. We know that the storm produced extraordinary circumstances, but we still expect insurers to live up to the highest standards.”
The department is investigating the three insurers’ claims practices by issuing an Insurance Law Section 308 letter, which is a request for information to which insurers are legally required to respond.
Narragansett policyholders have frequently complained that they have been unable to reach adjusters or that adjusters have failed to show up for scheduled appointments. Some homeowners were particularly disturbed because they had waited weeks for appointments and had taken time off from work to meet with adjusters, only to find that adjusters cancelled appointments with little or no notice.
The complaints about Tower Insurance create the appearance that the company has engaged in a pattern of failing to send adjusters to inspect damaged properties. Many New Yorkers had difficulty scheduling an inspection with Tower, while others have had their claims denied over the telephone without an adjuster visit.
The department has also received several complaints from Tower policyholders that they were unable to reach a company representative, that the company has delayed the processing of consumers’ claims, and that the company has improperly denied claims under the sewer backup endorsement.
Complaints against Kingstone concern the company’s failure to send, or to timely send, an adjuster; sending an adjuster who only inspected part of the property (for example, solely roof damage and not internal property damage); denying wind damage claims; disputed settlement amounts; and delayed settlement.
New York Insurance Regulation 64 requires that damaged property be inspected within 15 business days of a claim being filed, but for certain Sandy victims, the inspection time was shortened on Nov. 29, 2012 to six business days.
In addition, insurers are required to make a decision on a claim within 15 business days of completing the claim investigation. If they are unable to meet that deadline, insurers are required to send a letter to homeowners explaining the reason for the delay.
The department is asking insurers to provide information about how many extension letters they are sending, the reasons given for needing the extension and the projected time to completion.