Hurricane Sandy: Circular Letter No. 8 (2012)

The New York Governor’s Office has set forth a series of measures for insurers in the wake of Hurricane Sandy. These directives have been initiated with the hope that the revision of insurers’ policies will allow faster rebuilding, and also relieve some of the hardship experienced by property owners whose homes and/or businesses were damaged due to the storm. The suspension, titled Circular Letter No. 8 (2012), took effect retroactively on October 26, 2012, and states:

“A thirty (30)-day moratorium in the counties of New York, Bronx, Kings, Richmond, Queens, Nassau, Suffolk, Westchester, Rockland and Orange (Designated Counties) prohibiting the termination, cancellation or nonrenewal of automobile, homeowners and, subject to certain exceptions, commercial risk insurance Suspension of the automatic policy renewal provisions contained in these policies.”

This suspension, in effect, prohibited insurers’ cancellation or termination of insurance coverage—regardless of whether the policyholders had paid their premiums or not.

Additionally, insurers have been ordered to accept property owners’ submitted documentation of damage caused by the storm, rather than dispatch inspectors to the site. This provision allows home and business owners whose structures were severely damaged by the storm to begin the clean up process immediately without waiting for an inspector to evaluate the damage. According to Governor Andrew Cuomo, “We are acting to preserve homeowners' insurance rights when much is beyond their control. They have suffered enough and should not be hurt further by red tape or technicalities.” Documentation can include photographic or video evidence of property damage.

The provision also waives large hurricane deductibles, since hurricane-force winds were not maintained when the storm reached New York.

Those who seek medical attention as a result of Hurricane Sandy are able to receive medical treatment and prescriptions from both participating and non-participating providers, and prior authorization for treatment has been suspended.

The series of new provisions has been extended to financial institutions. State-chartered banks have been ordered to temporarily waive their ATM fees, overdraft fees, penalties for returned checks, late payment fees and penalties for early withdrawal from savings accounts when account holders demonstrate a need for funds due to the storm. The banks that will waive the fees and penalties are New York Community Bank, Apple Savings, Dime Savings Bank of Williamsburg, M&T Bank and Emigrant Savings Bank.

Because those affected by the disaster have been encouraged to file claims quickly, a 24-hour hotline has been created to help customers with the filing process and also answer any questions. Multiple insurance command centers have been established in areas where the storm damage was the most severe.