Provides for notice to homeowners when flood insurance or homeowners insurance shall be cancelled or be subject to a rate increase

BILL NUMBER:S4405A

Title of bill

An act to amend the insurance law, in relation to notices for increased premiums or cancellation of flood insurance or homeowners insurance

Purpose

To require that homeowners are given a minimum of 90 days notice prior to the increase or cancellation of a homeowners insurance policy or a homeowners insurance policy that includes flood insurance.

Summary of provisions

Section 1. The insurance law is amended by adding a new section 3444-a to require that insurers to provide notice of not less than 90 days to homeowners who have purchased homeowners insurance or homeowners with insurance with the National Flood Insurance Program, whenever the premium for such insurance is subject to a rate increase or cancellation.

Justification

Flood insurance premiums have been steadily increasing over the past several years due to changing weather patterns and subsequent damage. When Superstorm Sandy struck New York during October 29 - November 3 of 2012, the rains and floods caused extensive devastation in the storm zone.

Particularly after such a horrific event as a major storm when homeowners are overwhelmed and there are dozens of decisions to be made, they are entitled to a 90 day window to research and if they so choose, secure a different insurance carrier to purchase flood insurance through the federal program. 90 days is a reasonable amount of time for this notice to be given by the carrier, particularly in the aftermath of Hurricane Sandy and the option of relocation through the federal and state buy out programs.

Legislative history

New Bill.

Fiscal implications

None.

Effective date

Immediately.