NY probes insurers over slow response to Sandy claims

Houses damaged by superstorm Sandy on Nov. 4, Houses damaged by superstorm Sandy on Nov. 4, 2012, along Bayview Avenue West in Lindenhurst. Photo Credit: Newsday / Thomas A. Ferrara

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State investigators are looking into allegations that a Long Island company and two other insurers dragged their feet on superstorm Sandy claims.

Kingstone Insurance Co., whose parent Kingstone Companies is based in Hewlett, was named Thursday as a target of a state Department of Financial Services investigation. Manhattan-based Tower Insurance Co. and Pawtucket, R.I.-based Narragansett Bay Insurance Co. were also under investigation, the department said. The investigation centers on homeowners, renters, automobile and business interruption insurance, not flood insurance, which is a federal responsibility.

"It is essential that people whose homes were damaged or destroyed by Storm Sandy receive insurance they are eligible for as quickly as possible so they can return to their homes and begin rebuilding," Gov. Andrew M. Cuomo said in a statement. "We won't tolerate insurers not doing what homeowners paid them to do -- respond quickly in a disaster."

State officials have issued a demand for information, to which the insurers are legally required to respond. Insurers can be fined for violating insurance regulations. New York requires insurers to inspect properties within 15 days of a claim being filed. For certain victims of Sandy, the deadline was shortened on Nov. 29 to six business days, state officials said.

All three companies had "much higher than average" numbers of Sandy-related customer complaints, according to a financial services department news release. Kingstone was the subject of 66 complaints; that number made up 2.1 percent of all its Sandy claims in the affected area, according to the department. Narragansett had 147 complaints, or 1.3 percent of its claims, and Tower had 249, nearly 1.5 percent of its claims, according to the department.

"We take each one of those [complaints] seriously and we make sure that we are in touch with those customers, and we continue to cooperate with the department," Narragansett's chairman and founder, Nick Steffey, said Thursday. "We believe we've acted very responsibly."

Tower has already responded to the state’s request for information about its Sandy claims, and it is confident that when state officials review the information, they “will conclude that their characterizations of our claims handling practices have no factual basis,” a Tower spokesman said in a statement.     

Kingstone did not respond to calls seeking comment.

According to the financial services department, customers filed complaints alleging that Kingstone failed to send adjusters, or didn't send them in a timely way; sent adjusters who only inspected part of a property, such as only roof damage but not interior damage; delayed settlements; and improperly denied wind claims. Customers also disputed the settlement amounts offered by Kingstone.

The state's report cards for the majority of insurance companies in Sandy-damaged areas can be found at http://www.nyinsure.ny.gov/insurancereportcards.pdf

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