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What businesses should know about unfair claims practices in New York

On Behalf of | Jan 31, 2025 | Insurance Disputes

Paying for insurance coverage should provide reliable support for your business. When operational disruptions occur, you expect your insurer to process claims efficiently. However, what if the claims process isn’t as straightforward as it should be? More importantly, what if this happens often?

Every day, your doors remain closed, which means lost income, worried employees and mounting bills. Under New York law, you have protection against unfair insurance practices during these critical times.

What are your insurer’s obligations during claims processing?

Under New York insurance regulations, your insurance company must:

  • Acknowledge receipt of your claim within 15 business days
  • Respond to all other important communications within 15 business days
  • Maintain a dedicated department for handling complaints filed with the Department of Financial Services
  • Respond to Department of Financial Services inquiries within 10 business days
  • Keep records of all complaint activity

Take note that if you notify your insurance agent about a claim, this counts as notifying the insurance company unless the agent specifically tells you they aren’t authorized to receive claim notices.

What constitutes unfair claims practices?

While one mistake by an insurance company might not break the law, a pattern of unfair behavior does. This means if your insurer repeatedly treats claims unfairly as part of their normal business practice, they may be violating the law.

Unfair claims practices can include:

  • Providing incorrect information about your coverage
  • Unreasonable delays in claim communication
  • Failing to investigate claims promptly
  • Not providing fair compensation for your losses
  • Undervaluing your claim without justification
  • Inadequate disclosure of your coverage

If you notice any of these patterns during your claims process, document each instance carefully. If you notice a pattern of delays, unanswered communications or unfair claim handling, consider seeking professional legal counsel.

Protect your business interests

Insurance claim disputes can be complicated, especially when facing unfair practices. An attorney can help clarify your rights under New York law.

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