New York homeowners in disputes with their insurers over Hurricane Sandy property damage can enter a free mediation process to resolve the claims. The state's Department of Financial Services established the voluntary program, to be administered by the American Arbitration Association. Insurers will have to participate in mediations in good faith and foot the bill for the association's costs, New York officials said.
Under the program, homeowners may seek mediation for claims that are disputed or if they disagree with the insurer's denial of a claim. Government officials said the mediation is not binding on the homeowner and will not affect other legal rights, such as a right to request an appraisal or file a civil suit.
The program will handle disputed real and personal property claims, except those under motor vehicle insurance, which arose between Oct. 26 and Nov. 15 in New York City and surrounding counties. Claims made under the federal government-administered National Flood Insurance Program are not eligible.
New York officials said in the aftermath of other large hurricanes, Gulf Coast states also instituted nonbinding mediation programs, with settlement rates between 74 percent and 92 percent. As of Feb. 8, insurers representing 90 percent of the market in Sandy-affected areas reported that, for all non-flood claims, they have received 432,000 claims and had fully resolved 87 percent. These insurers have paid $3.6 billion of the $4.6 billion that they expect to pay, officials said.