The New York State Assembly recently passed a number of bills seeking to amend the state’s insurance laws. Most significantly, Assembly Bill 7455A seeks to amend New York insurance law by prohibiting insurers from using "anti-concurrent causation" clauses in homeowner and commercial insurance policies to preclude coverage for flood claims. Anti-concurrent causation clauses often bar coverage altogether when a loss results from both covered and excluded causes of loss (such as wind and flood). The purpose of the bill is to prohibit an insurer from denying or excluding coverage for loss or damage based on an exclusion (such as a flood exclusion) that would otherwise be covered by a policy when flood was a contributing factor to such loss.
Bill A. 7455A further requires that if a policy includes an anti-concurrent causation clause, the policy must clearly state which uncovered or excluded perils would have to cause the loss and whether the causation would have to be “proximate” or “remote” in order to be enforceable. If the policy includes such a clause, it must be disclosed to the policyholder prior to issuance of the policy. The bill would apply to all policies issued or renewed immediately after the law is passed by the Senate and is signed by the governor.
A second bill, A. 5780, would establish a private right of action for unfair insurance settlement practices relating to claims for loss or injury in an area where the governor has declared a disaster emergency. In any such action, policyholders would also be able to seek punitive damages and attorneys’ fees from insurers, if successful.
A third bill, A. 1092A, seeks to significantly shorten the amount of time in which insurers must accept or deny a disaster-related insurance claim. Bill A. 1092A would give insurers 15 days, with the possibility of one 15-day extension, to announce acceptance or rejection of a claim, and then give insurers three days to send payment.
Finally, Bill A. 5570 seeks to expedite the handling of litigation involving insurance claims for damages resulting from a state disaster emergency. In such cases, all discovery would be completed within 60 days from the date of a preliminary court conference at which parties must appear with authority to dispose of the case. Insurers would also be expected to enter into a mandatory settlement conference within fourteen days after a note of issue has been filed for settlement of claims.
The bills have been delivered to the New York State Senate for consideration and possible vote.