New York Gov. Andrew Cuomo on Monday announced a new mediation program for homeowners fighting their insurance companies in the wake of Hurricane Sandy.
The program, modeled after similar offerings launched in Florida and Louisiana, allows homeowners to attempt to resolve disputes with their insurers in nonbinding arbitration hearings, and requires their insurers to foot the bill for the cost of the mediation process.
Under the program established by the state's Department of Financial Services, insurers are required to notify homeowners of their right to use the mediation process if they suffered damage when Sandy struck the tri-state area in October.
Gov. Cuomo said in a statement the mediation program provides "a speedy, low-cost resolution of insurance claims." He said the program is "a win for everyone" because it is "much less expensive for insurers than litigation."
Mediation isn't available for disputes over car-insurance claims or the National Flood Insurance Program, which is administered by the federal government.
According to New York regulators, a mediation program sponsored by the Florida Department of Insurance after Hurricane Andrew in 1992 handled 2,400 claims with a settlement rate of 92%. In Louisiana, 15,000 cases were filed after 2005's Hurricane Katrina, and a mediation program there had a settlement rate of 74%.
New York's Department of Financial Services said "most" insurance claims in the state have been resolved, and that the largest insurers have paid $1.5 billion of the $1.7 billion they expect to pay for residential property claims as of Feb. 8.