BILL NUMBER: S3500

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to anti-concurrent causa-
tion clauses

 
SUMMARY OF PROVISIONS:

This bill would prohibit an insurance company from denying a claim that
would normally be covered under the policy solely because a separate
risk occurred at the same time or contributed to the loss but was not
covered under the policy or was specifically excluded.

 
JUSTIFICATION:

An anti-concurrent causation clause is a provision contained in many
homeowners policies that states that if a loss is caused by two or more
perils, one that is covered by the policy and one that is excluded, then
the loss is excluded, regardless of which peril is the primary cause or
              

whether the perils occurred concurrently or in a sequence. For example,
if a policy covers wind damage but not flood damage, and both events
happen at about the same time, then the damage to the property will not
be covered. When insurers that use anti-concurrent causation clauses
treat property damage as a single loss triggered by multiple perils the
result is a complete denial of the claim. In the aftermath of Superstorm
Sandy, many homeowners were surprised when insurance companies denied
their claims for perils that should have been covered under the policy
(such as windstorm damage) because the perils occurred at the same time
as a flood, which is excluded under most homeowners policies. As a
result, these homeowners found themselves without adequate insurance
coverage at a time when they needed it the most. This bill would rectify
this by prohibiting insurance companies from denying claims under these
circumstances.

 
LEGISLATIVE HISTORY:

S.2810 of 2017-18;
S.2351 of 2015-16;
S.5581 of 2013-14.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
Immediately.