Goldfeder: Insurance companies must be held accountable

Assemblyman Phil Goldfeder

Assemblyman Goldfeder Gives Families the Upper Hand When Disputing Insurance Companies

Goldfeder-sponsored bill would amend state Insurance Law to allow policyholders to bring civil lawsuits against insurers for failure to act in good faith during claim settlement process

Act includes provision preventing insurers from passing costs on to consumers in cases where policyholders successfully sue

Rockaway Park, Queens - Responding to widespread frustration among families in southern Queens and Rockaway over insurance company practices following Superstorm Sandy, Assemblyman Phil Goldfeder (D - Rockaway Park) sponsored legislation in the New York State Assembly allowing policyholders to bring civil lawsuits against insurers for unreasonable claim settlement practices. 

"Families in southern Queens and Rockaway diligently paid their insurance premiums in good faith with the idea that they would be covered in the event of a disaster, however this was not the case following Sandy," said Assemblyman Phil Goldfeder. "The Insurance Good Faith Act would help provide families with the additional tools to fight back against unscrupulous insurers denying claims for no good reason." 

The Insurance Good Faith Act (A257-2015) amends New York State Insurance Law to establish unjustifiable actions by insurance providers during the claim settlement process that policyholders could use as grounds for filing civil lawsuits to recover damages. These actions outlined in the bill include failure to provide customers with accurate information about their policy that relate the settlement, as well as failure to act in good faith by providing prompt, fair and equitable settlements when the insurer's liability is "reasonably clear." 

In addition, the proposed law encourages more transparency from insurance providers by considering not in good faith the failure to provide all written reports and documentation or failing to give policyholders a written explanation of denial. In cases where the policyholder successfully sues on the grounds of these good faith provisions, the insurer would be prohibited by the proposed law from attempting to recoup losses by raising insurance premiums. 

According to the bill, under current state regulations and case law, insurers can refuse to pay claims with relative impunity or provide payouts well below the value of the loss. By specifying grounds for legal action, the bill would provide families with additional tools in fighting settlements and even the playing field against insurance companies with the resources to fight claims of loss. Assemblyman Goldfeder, a member of the Assembly Insurance Committee, most recently introduced legislation creating the New York Flood Insurance Association to create new protections for homeowners in flood prone communities affected by Superstorm Sandy. For Goldfeder, the Insurance Good Faith Act is another step forward in fixing a broken insurance industry in the state following Sandy.

"One of the lessons we learned from Sandy was that insurance companies have the advantage when it comes to claims, and they have little interest in helping families with their loss," concluded Goldfeder. "This bill will help give our families the upper hand."