New legislation passed by the New York Assembly may change the way storm claims are processed in the state,
possibly forcing insurers to cover flood
damage from the next storm.
Bill A 7455A outlaws anti-concurrent
causation relating to flood, which would
allow homeowners to receive payment
for damage to a structure if they prove
the water was let in due to previous wind
or fire damage, said lawyers at Anderson
Kill’s 17th Annual Policyholder Advisor
Conference in New York City.
“If anti-concurrent causation is ruled to
not apply in New York State, it could mean
billions of dollars paid to claimants,” said
Finley Harckham, a senior litigator and
executive committee member for Ander-
son Kill. “It would apply to many claims,
such as [those] in Louisiana and Missis-
sippi, where people’s roofs were blown off,
exposing their property to torrential rain.”
A second bill, A 5780, establishes a pri-
vate right of action for unfair insurance
settlement practices relating to claims for
loss or injury in an area that was declared
a disaster emergency.
Harckham brought up a Con Edison
transformer explosion that occurred
during Sandy, plunging Manhattan into
darkness. Although the explosion was
caught on video and uploaded to the in-
ternet, the utility contested the incident
was actually an electric shutdown. Two
complementary pieces of legislation in
the assembly establish a shortened length
of time in which insurers can settle or dis-
pute a claim, respectively.
A 1092A gives insurers 15 days, with
the option of one 15-day extension, to accept or reject a claim, and 3 days to send
The second bill expedites actions involving claims for damages resulting
from a disaster emergency: any action
involving an insurance claim for damages
to property in a disaster area must be announced within 30 days after filing the
initial request for court intervention, and
all discovery, (identification and reporting of losses) must be completed within
60 days from the date of the first hearing.
“The new laws would not apply retroactively to Sandy victims, but it would
help a lot of policyholders when the next
storm hits,” said Harckham.
N.Y. Bill Challenges Policy Language
Excluding Flood Coverage
By Anya Khalamayzer, PropertyCasualty360.com
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