Agents Tell New York Senate Panel of Flood Insurance Claims Hassles

A director of the Independent Insurance Agents & Brokers of New York told lawmakers and regulators that New Yorkers are dealing with unnecessary hassles when they make flood insurance claims.

William J. Oliver, CIC told the panel that the difficulty of the claims process discourages people from buying flood insurance. Oliver is president and CEO of The Partners, an insurance agency in Vestal, N.Y., and a member of the IIABNY board of directors.

The remarks came at a roundtable discussion sponsored by New York State Senate Insurance Committee Chair James L. Seward (R-Milford) and Sen. John J. Bonacic (R-Mount Hope).

The purpose of the Albany session was to gather information regarding the administration of the National Flood Insurance Program (NFIP) in New York State and to explore ways to ensure adequate flood insurance coverage for homeowners. New York Superintendent of Financial Services Benjamin M. Lawsky and Congressman Paul D. Tonko (D-Amsterdam) also attended.

Thousands of New York State residents, including many in Sen. Bonacic’s district, suffered flood damage as a result of Tropical Storms Irene and Lee, which struck areas of the state in August and September of 2011. Many homeowners did not have flood insurance coverage to help them recover from their losses. Some of those who did have coverage found the claims process to be very difficult.

Oliver echoed the comments of another participant that flood insurance would be more popular if the claims process was not so difficult. “We were flooded in 2006 in our area,” Oliver told the group. “Even before then, but especially since then, we have done everything we can to talk to people about buying flood insurance, whether you’re in a flood zone or not.” However, he reported, many people heard about the problems others have had with the claims process and decided it was not worth it for them to buy the coverage. Many of these people were uninsured when flooding struck again after last summer’s storms.

He described one client who did have flood insurance on his home. Authorities condemned the home after it was flooded last September, and the client had to move to a temporary address. The insurance company mailed the payment to the condemned address, and the client did not receive it. A subsequent check, sent to the correct address, was for the incorrect amount, and the company had to issue another check. This further delayed the client’s recovery.

“If the claims process was better and easier, FEMA would sell more of this (flood insurance),” Oliver said.