Denenberg Demands Insurance Companies and Banks Release Funds

Legislator Dave Denenberg, D-Merrick, is announcing new legislation Thursday to help those struggling to pay for repairs to their homes following Superstorm Sandy.  He has introduced two new bills that would potentially help release much-needed funds from insurance companies, as well as banks or mortgage lenders, who have delayed payment to Nassau residents having a hard time paying for heat, electricity and construction.

Homeowners are forced to dip into their savings accounts because insurance companies and banks are holding up the process by delaying payment and misinforming their customers.  With these two bills, Legislator Denenberg and his Democratic colleagues are hopeful that Sandy victims can receive the money they desperately need to rebuild their homes and find some sort of normalcy restored to their lives.

“It is unconscionable insurance companies and banks are withholding money their customers rightfully deserve,” said Legislator Denenberg. “The money belongs in the people’s hands.  It’s time for them to pay up so that Sandy victims can continue getting their lives back on track.”

The first bill Legislator Denenberg and the entire Democratic caucus are supporting would amend the County Administrative Code regarding Unfair Trade Practices to provide a more speedy approval of insurance claims, as carriers are suspected of purposefully delaying and denying payment to customers in dire need.

Under this law, if the insurer wrongfully denies a valid claim, fails to answer a claim within 30 days or delays payment without providing reason for doing so, they will be fined and subject to lawsuit by the County Attorney.  The insurance company would also be liable for the customer’s full insurance payment, plus interest, as well as reimbursement of other subsequent damages including (but not limited to) emotional distress, property damage and attorney’s fees.

The second, proposed by Legislator Denenberg, would require banks to promptly release homeowners’ insurance payments in the event of a major disaster.  This would ensure that once the money is released, customers would receive their payment in a reasonable amount of time – not several weeks or months.

Banks or lending institutions that hold the mortgage on a home are considered “part owner.”  Any insurance claim that is paid out for damages must be signed-off by the homeowner and bank or lending institution that holds the mortgage.

Numerous complaints from residents state that bank delays and burdensome requirements have delayed their ability to move forward with necessary home repairs. This also affects local businesses and contractors, too, as they are relying on the rebuilding of Nassau County to help them recover the business they lost as a result of Sandy.  If enacted, this law would help expedite the payment of insurance proceeds to homeowners affected by Sandy or a similar natural disaster in the future.