Hurricane Sandy victims who live on Staten Island will now have access free mediation sessions to help settle disputes with their insurance companies, according to the New York State Department of Financial Services.  According to the most recent reports, there are still approximately 15,000 residents who have unsettled or denied claims relating to damage caused by the storm.

The American Arbitration Association has been chosen by the Department of Financial Services to provide the free mediation services for the approximate 841 residents of Staten Island who have yet to settle open claims for damage that occurred during the hurricane.  Jeffrey T. Zaino, Vice President of AAA, stated, "It's voluntary.  It's non-binding,  it's non-adversarial,  unlike arbitration or litigation.” 

The reason that the services are provided for free is because insurance companies involved with the disputes will be covering the expenses of the mediation process.  Allowing mediation as an option means that there is extra incentive for insurance companies to settle the claims before mediation is even necessary.  However, those claims that aren’t settled within 45 days of the documents being submitted will qualify, as long as the damage occurred to real or personal property and as long as the original claim filed was denied by the insurance company. 

In the process of mediation for these Staten Island residents, the policy holder and a representative for the insurance company will complete a 2-hour mediation session with a mediator assigned by AAA.  If a settlement is offered, the policy holder has three days in which to accept or reject the offer. 

In New York, as well as elsewhere throughout the country, state and city lawmakers are designing legislation that leans more toward favoring mediation as a form of alternative dispute resolution to resolve insurance claim disputes.  Many states that have implemented mandatory mediation for disputed or denied insurance claims have seen great progress with the programs.