Relates to expediting actions involving insurance claims for damages resulting from a state disaster emergency

BILL NUMBER:S5531

Title of bill

An act to amend the civil practice law and rules, in relation to expediting actions involving insurance claims for damages resulting from a state disaster emergency

Purpose

To allow property damage-related litigation in State Disaster Emergency declared counties to proceed in an expedited manner.

Summary of specific provisions

Section 1 would add new rules 3410, 3411, and 3412 to the civil practice law and rules, and create a mandatory expedited preliminary conference for property damage claims against insurers for damages sustained in counties where a State Disaster Emergency has declared by the Governor pursuant to Executive Law Section 29-a.

Section 2 would amend rule 3403 (a) of the civil practice law and rules to allow such litigation to be granted a special trial preference, thus expediting ultimate resolution of same.

Section 3 states that this act shall take effect immediately.

Effects of present law which this bill would alter

This bill would allow claims against insurers resulting from property sustained, where the Governor has declared a State Disaster Emergency, to be advanced and expedited.

Justification

Where many insurers have dealt with the victims of property damage losses sustained as the result of State Disaster Emergencies, i.e. most recently Storm Sandy, in a responsible and timely manner, some insurers have not. This has resulted in litigation by property owners, i.e. homeowners, to enforce their rights under contracts of insurance. Many of these property owners have sustained utter financial ruin due to severe property damage losses, and this bill seeks to allow for a swift and certain resolution of their claims against their insurers in court.

For example, there is no reason why an individual who has lost their home and all of their belongings due to Superstorm Sandy should have to wait years for their claims against their insurer to be adjudicated in court.

This bill requires that upon institution of an action by an insured against an insurer for damages related to a State Disaster Emergency as declared by the Governor, the court shall hold a preliminary conference within thirty (30) days after the request for judicial intervention is filed.

In addition, this bill requires that all parties shall appear for preliminary conference by a person fully authorized to dispose of the case. It is hoped that requiring same will permit many of such actions to be resolved without the need for further proceedings.

For actions which cannot be resolved at the preliminary conference, the bill requires that discovery be completed within 60 days of the holding of the conference, absent good cause shown.

Finally, this bill allows for these types of actions to be given a special trial preference, and be tried in advance of most other types of litigation. An expedited discovery schedule and a special trial preference represent a recognition that property owners who have lost all of their possessions due to natural disaster (as declared by the Governor), should have the ability to obtain prompt and swift adjudication of their claims against any insurers who would ostensibly be contractually responsible to them.

Prior legislative history

New bill.

Fiscal implications for state and local governments

No negative effects anticipated. If contractual claims against insurers are resolved in a more timely manner, there may be some positive effects upon State and Local government disaster-related expenditures.

Effective date

Immediately.