Albany, NY – New York’s insurance chief says insurers are wrong when some tell policy holders that damage from Tropical Storm Irene isn’t covered under flood insurance.
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Financial Services Superintendent Benjamin Lawsky says no insurer should even consider denying payments under a flood insurance policy.
Lawsky says residents also shouldn’t have to face a deductible for a hurricane because Irene was termed a tropical storm by the time it hit New York.
The national Insurance Information Institute notes, however, that standard homeowners’ and renters’ insurance doesn’t cover flood damage.
Federal Emergency Management Administration officials say many people hit by flooding in the Hudson, Schoharie and Mohawk valleys and in the Adirondacks don’t have flood insurance.
These political hacks are clueless. They cannot unilaterally rewrite the terms of a contract after the fact. An insurance policy is a contract that can only be amended prospectively with the mutual consent of the parties. If the policy has a flood exclusion (as most do) than the insurance companies do NOT have to pay flood damages. If the policy specifically says that the storm must be deemed “a hurricane” by the National Weather Service at the time of the damage, than a “tropical storm” doesn’t count. If the New York state government wants to be charitable and use tax money to cover excluded damages, let them do so but don’t ask insuance policy shareholders to pay the tab.
You’re missing the point. He said “no insurer should even consider denying payments under a flood insurance policy.” Even when people have flood insurance, the insurance companies try to deny everything they can up front hoping the homeowner won’t fight it. That is WRONG! But they gain that way, as many people don’t bother to fight.
The hurricaine vs tropical storm is also not what you’re making it out to be. Many policies have an exclusion or higher deductible for hurricaines than other storms. Once again the insurance companies will try to use those against the policyholder. That’s why he is stressing that once the storm hit NY it was no longer a hurricaine, and therefore not subject to those exclusions or higher deductibles.
This is not about rewriting the rules after the fact. There are many insurance related laws on the books, and insurance companies must conform to the laws of the state in order to business there. He is simply reminding insurers and policyholders alike that there are guidelines that must be followed. If they do not, you have the laws of the state behind you.