Connecticut Governor Dannel Malloy recently signed a bill to force the insurance department to generate a mediation program for claims related to catastrophic events.  After the impact of Hurricane Sandy and other natural disasters, consumers have complained about not only the lengthy claims process, but also the delays associated with lawsuits when claims are denied or need to be appealed. 

The bill, known as H.B. 6549, was signed on June 21st and will go into effect on October 1st of this year.  The new mediation program will apply to claims of loss and damage linked to personal or real property from a claimants personal risk insurance policy, a unit owner's association property insurance policy, or a condominium association master policy.  Policies that are excluded are those issued under the National Flood Insurance Program. 

Claims that fall into the category of applicable for the mediation program are those where the difference between the claimant and the insurance company is more than $5,000.  If chosen, parties could also elect to go through mediation even if the dispute is over a smaller amount. 

If a case does go into mediation an attempt to reach a resolution, the insurance commissioner would appoint a designee to monitor the mediation.  The insurer is responsible for the payment of the mediation fee.  The use of mediation does not limit the claimant from using other avenues to attempt to resolve their issue.

Other states have already implemented similar programs.  The sheer number of claims in the Northeast from Hurricane Sandy last year stalled out many claims and generated a lot of complaints from consumers.  Many consumers were dissatisfied with the service they received from their insurance companies, and this means the potential for numerous lawsuits that could flood the courtroom in the upcoming months and years.