Cuomo Changes Insurance Rules

Imposes 30-Day Moratorium on Insurance Companies Cancelling Policies

Governor Andrew Cuomo today announced that, at his direction, Financial Services Superintendent Benjamin M. Lawsky has instructed insurers to accept homeowners’ documentation, including photos and video, of losses so residents can discard debris before a second storm hits the region.

Typically, insurance companies require an on-site inspection first before a claim can be processed. In addition, the State has imposed a 30-day moratorium on cancelling or terminating homeowners’ and small business owners’ insurance policies in storm stricken areas for any reason, including non-payment of premiums. 

“Health and safety must come first. If debris is creating unsafe conditions, people must be able to clear it away without hurting their right to make an insurance claim,” Governor Cuomo said. 

“We are acting to preserve homeowners’ insurance rights when much is beyond their control. They have suffered enough and should not be hurt further by red tape or technicalities.”

Superintendent Lawsky added, “If debris is dangerous, homeowners should carefully document their losses and then dispose of the debris. Taking photos and videos and even keeping samples of damaged materials is a good idea. We will be vigilant in protecting homeowners who have already suffered so much.” 

Both the directive dealing with dangerous debris and the moratorium on terminating policies cover the storm damaged areas: New York City and Nassau, Suffolk, Westchester, Rockland and Orange counties. The moratorium will last for 30 days, but may be extended if necessary.

The Insurance Law gives the Superintendent the power to modify or suspend provisions for a limited period in any area of the State where the Governor has declared a state of emergency.

Visit http://www.dfs.ny.gov/dfs_suspension_order_exe.pdf for more information on the directive and the moratorium.

With respect to the moratorium, Superintendent Lawsky stated, “Many people have lost everything, others cannot return to their homes. They should not be penalized if they are unable right now to make a payment on their insurance policy, which they desperately need to help them recover.”

The Governor has already announced that hurricane deductibles in most downstate homeowners’ insurance policies will not apply because Sandy did not have sustained hurricane force winds when it hit New York. Most insurers have agreed not to apply these deductibles, which can amount to tens of thousands of dollars. 

The DFS directive covers homeowners’ insurance policies. Flood insurance policies are covered by FEMA regulations.

FEMA is also expected to issue guidance on this issue. Homeowners with both homeowner’s and flood insurance should follow FEMA rules to preserve their claims under flood insurance. 

For claims under homeowners’ insurance, if dwelling debris must be removed before the adjuster is able to examine it, homeowners should:

1. Inventory all the damaged items.
2. Take individual color photos of the damaged property, targeting any high ticket items. If possible, videotape the damage items.
3. Have the camera set to record the date / time.
4. If possible, take samples or swatches of carpeting, wallpaper, furniture upholstery, window treatments, and other items where quality will be a claims factor.
5. The inventory should reflect the corresponding picture for validation.
6. Keep this information in a secured location to share when the adjuster arrives.

This process applies to all contents that are damaged and will be claimed.