Nassau Legis. Dave Denenberg (D-Merrick) announced proposed legislation Thursday to help release funds from insurance companies, banks and mortgage lenders to superstorm Sandy victims, some of whom are having difficulty paying for heat, electricity and construction.
“It is unconscionable that insurance companies and banks are withholding money their customers rightfully deserve,” Denenberg said. “The money belongs in the people’s hands. It’s time for them to pay up so that Sandy victims can continue getting their lives back on track.”
The first bill that Denenberg and the entire minority Democratic caucus support would amend the County Administrative Code regarding unfair trade practices to provide a more speedy approval of insurance claims, which he said he suspects are purposefully denied or delayed to customers.
Under the proposed law, if the insurer wrongfully denies a valid claim, fails to answer a claim within 30 days or delays payment without providing reason for doing so, it will be fined and subject to lawsuit by the county attorney. The insurance company also would be liable for the customer’s full insurance payout, plus interest, as well as reimbursement of other subsequent damages.
The second proposal would require banks to promptly release homeowners’ insurance payments in the event of a major disaster.
Banks or other lending institutions that hold the mortgage on a home are considered “part owner.” Any insurance claim paid for damages must be signed off on by the homeowner and the lending institution that holds the mortgage.
Frank Moroney, a top aide to Presiding Officer Norma Gonsalves (R-East Meadow), said the Republicans are looking at this issue but so far see it as a federal and state issue.