by Cyrus Dugger, Thu Jun 29, 2006 at 09:23:25 AM EDT
Have you ever been in an accident? Have you ever had to go through the process of filing a claim with your auto insurance company? For any who have had their claims challenged they know that the deck is stacked against them. Insurance companies may require that claimants fill out additional forms, submit to "independent" medical examinations, and/or report to make statements under oath. Given the procedural hurdles a claimant must go through and the insurance company's ability to deny and then endlessly litigate claims, the average New York resident faces an uphill battle.
State Assemblyman Heastie has recently proposed a bill (A.8267) that would make life even easier for auto insurance companies (note that although the most recent legislative session ended the bill will likley be re-submitted as is). The bill proposes to allow insurance companies to disregard the current 30 day time limit they have to either pay or deny claims and extend it indefinitely with the caveat that the insurance company pay 2% interest a month on the claim and pay reasonable attorneys' fees once the claim is ultimately found to be valid. This measure applies across the board to all claimants that the insurance company decides to investigate for fraud. In theory, auto insurance companies would be able to indefinitely withhold benefits from all claimants in New York as long as they eventually paid 2% interest and reasonable attorneys' fees.
This law would mean that a person with a valid auto insurance claim who is incorrectly flagged and investigated as having filed a fraudulent claim may receive no payments for an indefinite period of time during which they receive nothing for their medical costs and lost wages.
Not only is this rule unfair in that it makes people wait needlessly for the valid claim that they are owed after paying their insurance premiums for years, it also assumes that a claimant can actually pay out of pocket lawyers' fees in the first place (plus their medical bills if they are uninsured), let alone that they can wait to be reimbursed for them at some unknown point in the future. This framework also creates an ironic situation in which claimants must continue to pay their premiums while their insurance company withholds the very benefits of their insurance policy from them.