Insurance Mediation Legislation Currently Being Considered in the Connecticut General Assembly
Thursday, March, 14, 2013
After the confusion and damage caused by Hurricane Sandy, the insurance department of the State of Connecticut has proposed mediation as a state-wide option to help policyholders resolve disputes over claims. The focus of the program will be on claims that arise out of a catastrophe, such as Hurricane Sandy.
The legislation for the proposed program is House Bill No. 6549, entitled “An Act Establishing A Mediation Program for Certain Insurance Policy Claims Arising From A Catastrophic Event.” The Connecticut General Assembly will consider the bill before making it law.
According to Connecticut Insurance Commissioner Thomas Leonardi, “Connecticut has seen more than its share of catastrophic storms in the past two years. We fully understand that homeowners are under great stress in the aftermath as they try to put back their lives and navigate the claims process.”
The Commissioner went on to state, “This voluntary consumer mediation program would give Connecticut policyholders and the department another key tool for helping resolve catastrophic claims in a more timely manner.”
The mediation program would be a non-adversarial, formal method for insurance claim dispute resolution between the policyholder and the insurance company carrying the policy. In order to qualify for the program, homeowners or property owners must live within an area that has been declared a state of emergency by the Connecticut governor.
Neighboring New York and New Jersey have also adopted a similar program in the aftermath of Hurricane Sandy. Both states suffered catastrophic losses following the superstorm and passed legislation for mediation programs to give both homeowners and insurance companies a legal process to help deal with the flood of disputed claims. Rhode Island, Florida, Louisiana, Mississippi and North Carolina are other states that have instituted such mediation programs, and all of them have been successful.
The proposed legislation would make mediation a mandatory process for insurance companies and a voluntary process for policy holders.