NY imposes new rules to speed Sandy insurance claims

New York State has imposed new rules forcing New York State has imposed new rules forcing insurers to process claims more quickly in areas hit by superstorm Sandy. The rules apply to homeowner's, renter's and business interruption insurance, but not flood insurance, which is a federal responsibility. These houses are in Garden City. (Oct. 29, 2013) Photo Credit: Newsday / Audrey C. Tiernan

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New York has imposed new rules forcing insurers to process claims more quickly in areas hit by superstorm Sandy.

Insurers still have 15 business days after they receive a claim to decide whether, and how much, to pay. But under the new Department of Financial Services  rules, insurers that can't decide within that time can only get 30-day extensions, instead of the 90 days allowed under previous rules.

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The rules apply to homeowner's, renter's and business interruption insurance, but not flood insurance, which is a federal responsibility. Most of Sandy's devastation was caused by flooding.

Insurers qualify for extensions by sending letters to customers describing the reason for the delay. Now, the letters triggering extensions must also include the expected date that a decision will be made.

In addition, for every claim extended past the initial 15-day period, insurers must report to the Department of Financial Services every week, detailing the amount of the claimed loss, the reason for the extension, the number of extensions already granted and the expected decision date.

Also, if a policyholder must submit more documents in order for a claim to be processed, the insurer must describe the needed documents in writing.

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Gov. Andrew M. Cuomo announced the changes Tuesday. The new rules "will push insurers to move those claims as quickly as possible so people can repair their homes and get back to their lives," Cuomo said in a statement.

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