Liberty Mutual Insurance is enlisting the help of an independent mediator to help resolve claims stemming from Hurricane Sandy and to potentially shorten the claims-settlement period.
Kenneth R. Feinberg, an attorney with Feinberg Rozen LLP, will be heading up what Liberty has dubbed an alternative dispute resolution program. It's a voluntary, three-phase process that policyholders can use after the traditional claims-adjustment method and before court.
"While we anticipate the overwhelming majority of our Sandy claims will be satisfactorily settled in a timely manner through the traditional process, there will be a small group of customers with highly complex issues that may benefit from an alternative route to resolve their claims," Ted Gramer, Liberty Mutual executive vice president and chief claims officer of personal insurance, said in a statement. "Resolving claims disputes through proven alternatives to the court system could accelerate an expensive settlement process for customers from possibly years to just a few months."
Feinberg previously said the purpose of the program is to avoid litigation and courtroom time and that he ran a similar program following Hurricane Katrina and it was highly successful.Following Sandy, he said potential issues he's expecting to see are whether damage to homes was caused by flood or wind and rain. Other issues still will be determining the cost of repairs and hashing out business interruption indemnification.
There have already been some lawsuits filed over Sandy-related claims disputes. Fisker Automotive Inc. recently filed a suit against its insurer, XL Insurance America Inc., claiming the insurer was wrong to deny a claim. Fisker lost 338 hybrid-electric cars, which are valued at $33 million, to Sandy-flooding.
In a separate case, National Interstate Insurance Co. of Hawaii wanted a federal court judge to sort out an insurance dispute it's having with International Motor Freight Inc. over damage to the freight company's vehicle fleet caused by Hurricane Sandy.