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Cuomo: Homeowners Will Not Pay Hurricane Deductibles

New York Governor says state's Department of Financial Services will monitor how claims are handled by insurance companies.

Homeowners across areas of New York impacted by Hurricane Sandy will not have to pay deductibles on insurance claims stemming from damage caused by this week’s storm.

Gov. Andrew Cuomo on Thursday said in a press release that the state’s Department of Financial Services (DFS) has informed the insurance industry that hurricane deductibles should not be triggered by the storm. This will prevent coastal homeowners from having to pay deductibles in their insurance policies, Cuomo said.

“Homeowners should not have to pay hurricane deductibles for damage caused by the storm and insurers should understand the Department of Financial Services will be monitoring how claims are handled,” he said.

According to the Governor, many homeowners’ insurance policies for homes located in downstate areas contain hurricane deductibles based on a percentage of a property’s insured value. These deductibles typically range from one percent of a home’s insured value to five percent. For example, with a five percent deductible on a home insured for $300,000, the homeowner would have to pay for the first $15,000 of damage.

“We will be working with insurers to help them respond as quickly as possible to homeowners who need to file claims,” said Benjamin M. Lawsky, superintendent of Financial Services. “We will be sending our mobile command center to hard hit areas to help consumers with insurance questions and problems.”

DFS officials suggest that homeowners who experienced property losses to file insurance claims with their insurers promptly after losses occur and include policy numbers and all information relevant to the loss. To best document losses, officials said homeowners should take photos or videos showing the extent of the losses before cleaning up damage.

Officials also said homeowners should make only necessary repairs to prevent further damage to property, like covering broken windows. Permanent repairs should not be made until after insurers have inspected losses. Damaged personal property should be kept until after an insurance settlement has been reached.

In addition, homeowners should cooperate fully with their insurer and keep a diary of all conversations with the insurance agent, including the agent’s name, as well as the times and dates of all calls or visits.

DFS officials noted that flood damage is only covered by flood insurance, which is a federal program administered by the Federal Emergency Management Agency. Homeowners who have flood insurance and have flood damage should make claims through that insurance.

DFS has activated a Disaster Hotline to answer consumer questions and help with problems. The Disaster Hotline number is 800-339-1759. It is staffed Monday – Friday from 8 a.m. to 8 p.m. and Saturday and Sunday from 9 a.m. to 4 p.m.

Homeowners unable to resolve disputes with insurers can file complaints at http://www.dfs.ny.gov/consumer/fileacomplaint.htm.

SPK November 02, 2012 at 08:25 PM
Don Pachner's answer makes sense. The governor's answer sounds like something a King would issue nullifying legal contracts. That would be a most dangerous precedent like what's going on today with mortgage bankruptcies, or what happened during GM’s bankruptcy. Thought the US is suppose to be a country of laws.
Don Pachner November 02, 2012 at 09:53 PM
Steve, You may find this article by Alison Frankel's in Thomson Reuters intersting: "Can governors bar insurers from charging hurricane deductibles". I think it covers all the questions raised in this blog. http://newsandinsight.thomsonreuters.com/Legal/News/ViewNews.aspx?id=60245&terms=%40ReutersTopicCodes+CONTAINS+'ANV'
SPK November 03, 2012 at 01:14 AM
Thanks, Don, the upper hand appears to rest with the governor. But his wording appears to be decision by fiat...no wonder I don't trust him to run my bath water.
louey louise November 03, 2012 at 05:28 AM
cuomo really pushes the limits here rewarding irresponsible the net result the responsible will continue to pay higher premiums my basement was known to flood I put 20 ' of sewer pipe on all my downspouts these are inexpensive pipes done by hand 10 ' pipes you just stick on the downspouts I put in a new sump pump in basement removed all of my furniture new roof on the shed topped my trees no permit necessary if pruning verse cutting down with all that my basement never flooded not a drip I also had a gasoline generator and had 3 gas cans 5 gallons each it ran not an issue heat and lights and pump I never needed we knew this was coming media said it at least 5 days out all in all simple reasonable steps a homeowner should take and I had No none zero issues, yes lost large trees and had to work hard to clear driveway and yard, did it all my self. No insurance claim. Now it appears I will pay a higher premium because many chose not to take precautions. I have to pay for others that did nothing to prepare ? Yes, that appears true. When do we award the responsible and stop giving gifts to the irresponsible ? If your basement flooded twice before If you did not take trees down If you knew but did nothing you should have, I m sick and tired of paying for you.
Don Pachner November 03, 2012 at 01:58 PM
This is in response to "Local Resident"...you are absolutely wrong. Disasters are an insurance company's best advertising, and they are out in the field inspecting damage and cutting checks to policyholders. If you have your homeowners insurance in a company that is balking at payment on a legitimate claim, you should probably ask your independent agent to look at options with other insurers. You should also be thinking about filing a complaint with the Department of Financial Services for baid faith claim practices if they are not paying a legitimate claim you have submitted. Also, your insurance broker or independent agent is your representative when dealing with insurance companies, you should be speaking to your agent or broker about it if you need assistance in understanding coverage or obtaining a claim settlement/payment. If you go directly through a "direct writer" like Allstate, that is not an option.

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