New York Introduces Superstorm Sandy Homeowners Insurance Mediation Program


The state of New York introduced a new program this week that sets out to provide homeowners insurance mediation to individuals who were impacted by Superstorm Sandy. The program is meant to provide Sandy victims with a low-cost option for challenging their insurance companies, if consumers feel they have not been treated fairly in the claims process without having to shoulder the expense of filing a lawsuit.

Superstorm Sandy Insurance Denials Begin

As Superstorm Sandy victims attempt to recover from the October 29 storm that took 125 lives in the United States and resulted in $62 billion in damage, they are looking for help in paying for the repairs or reconstruction of their homes.

Reports show insurers are expecting to pay in the ballpark of $1.7 billion to settle 287,000 homeowners’ claims in New York alone. Unfortunately, all but roughly 5 percent of those claims have been resolved.

Some homeowners have complained that they have been denied claims for unfair reasons, while others who have had their claims resolved feel they did not receive what they deserved.

It’s for this reason that the state has created a program and enlisted arbitration assistance to help homeowners settle their disputes.

How the Homeowners Insurance Mediation Program Works

As a part of the homeowners insurance mediation program, run by the state Department of Finance, the American Arbitration Association will help homeowners determine whether settlements they’ve received were fair and if claims have been improperly denied.

Here’s how the program works:

  1. Insurers must notify homeowners of the state’s new mediation program, if any part of a claim is denied.
  2. If a policyholder asks for mediation, the insurer must alert the American Arbitration Association.
  3. Mediation can be conducted in person or via phone or video conference.
  4. Homeowners are not required to accept the findings.

If a homeowner chooses to take on mediation, homeowners insurance companies are required to pay for them, which makes the program cost-free for Superstorm Sandy victims.

The program only applies to disputes over homeowners insurance claims, which usually include damage from wind and fire. It won’t apply to auto insurance claims or flood settlements, the latter of which is handled by the federal government.

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