While here in Canterbury the earthquake affected population are receiving no assistance from their Government the story is quite a different one in the US. It is only five months since the Sandy Hurricane yet Governor Cuomo announces that the Department of Financial Services will investigate insurers for Unacceptable Claims Practices resulting from Hurricane Sandy. (See February 21, 2013 from http://www.governor.ny.gov/press_archive). There are three insurers in particular they will be looking at because of the high number of complaints the Department of Financial Services has received regarding their performance. The insurers are Narragansett Bay Insurance Company, Tower Insurance Company and Kingstone Insurance Company.These insurers will be investigated for:1. failure to send adjusters in a timely manner;
2. failure to process claims in a timely manner;
3. inability of homeowners to contact insurance company representatives.
In addition the authorities of New York State has been keeping a watchful eye over the number of compliants and has published updated report cards assessing the insurance companies’ performance in responding to the disaster and paying claims. (See http://www.nyinsure.ny.gov/insurancereportcards.pdf for a breakdown of each insurers performance as of Feb 15, 2013). New Zealand insurers would not come even close to these time frames or performance.
“It is essential that people whose homes were damaged or destroyed by Storm Sandy receive insurance they are eligible for as quickly as possible so they can return to their homes and begin rebuilding,” Governor Cuomo said. “We have been working with the insurance industry to streamline the rules and thank the companies who have responded. But we won’t tolerate insurers not doing what homeowners paid them to do—respond quickly in a disaster.”
Have you heard anyone in authority in New Zealand make similar statements – and we are now two years and five months post the first event! From international comparison it is clear that the timeframes here in Christchurch have been extended well beyond anything that could be considered ‘reasonable’. There is a strong whiff of manipulation and deliberate delay.
Benjamin M. Lawsky, Superintendent of Financial Services went on to say that “These practices and the volume of complaints on outstanding claims are totally unacceptable. New York policy holders have paid their premiums and have every right to expect a timely processing of their claims so that they can rebuild their homes and businesses. We know that the storm produced extraordinary circumstances, but we still expect insurers to live up to the highest standards.” When is CERA or the New Zealand Government going to stand up and make the same statement. Cantabrians are still waiting for assistance. In the most capitalist society in the world you don’t see the authorities ‘leaving the recovery to market forces’- rather they intervene on behalf of the population and quickly.
Some of the complaints include: insureds having been unable to reach adjusters or adjusters having failed to show up for scheduled appointments. “The complaints about Tower Insurance create the appearance that the company has engaged in a pattern of failing to send adjusters to inspect damaged properties. Many New Yorkers had difficulty scheduling an inspection with Tower, while others have had their claims denied over the telephone without an adjuster visit. The Department has also received several complaints from Tower policyholders that they were unable to reach a company representative, that the company has delayed the processing of consumers’ claims, and that the company has improperly denied claims under the sewer backup endorsement.” Complaints against Kingstone concern the company’s failure to send, or to timely send, an adjuster; sending an adjuster who only inspected part of the property (for example, solely roof damage and not internal property damage); denying wind damage claims; disputed settlement amounts; and delayed settlement.
New York Insurance Regulation 64 requires that damaged property be inspected within 15 business days of a claim being filed, but for certain Storm Sandy victims, the inspection time was shortened on November 29, 2012 to six business days. In the event that they are unable to meet that deadline, the Department is asking insurers to provide information about how many extension letters they are sending, the reasons given for needing the extension and the projected time to completion.
15 days people! These figures make the New Zealand insurers look completely incompetent or fully aware of the fact that they have no legislative requirement to settle in any particular time frame- the latter is more likely. Land damage or not there are still thousands in the green zone waiting for insurers to carry out their mandated obligations under the insurance policy. So who is watching the performance of New Zealand insurers? The short answer is – no one and they know it!
In addition in the last day or so, New Jersey has said it will launch a mediation program for Hurricane Sandy insurance disputes as has been their practice in past major catastrophes in the US. This will provide consumers with the chance to settle insurance disputes without the time and expense of litigation. The program would sit an experienced mediator between policyholders and their insurance companies in order to review the case and assist in settlement discussions. Similar efforts were undertaken with success in Gulf Coast states after hurricanes Katrina and Rita in 2005. This will lead to significant cost savings in comparison with litigation. Insurance companies will pay for the cost of the mediator, although policyholders will be expected to pay their own legal costs, such as hiring an attorney. Claims would have to be greater than $1,000. Mediation is only available for policies in force at the time Sandy made landfall. The mediation program will be up and running by early April 2013. It is thought that the program could end up processing about 20,000 to 25,000 disputed claims. New York Governor Andrew Cuomo earlier today announced a similar program would run in New York as well. (See http://www.nj.com/business/index.ssf/2013/02/nj_to_launch_mediation_program.html).
This system has also been proposed for Christchurch but the suggestion continues to fall on deaf ears. (See https://thechristchurchfiasco.wordpress.com/2012/10/31/are-you-a-christchurch-resident-needing-help-to-settle-your-private-property-insurance-claim/). Just what are the authorities in Christchurch doing to protect policyholders from the unreasonable tactics of their insurers? For many litigation is a financial impossibility- who is going to assist those citizens? I continue to ask this question and it continues to go unanswered.
~Future Proofing for a sustainable, participatory, democratic society.
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