Policyholders get disaster-claim notices

Summary#

The Fair Assistance Insurance Responsibility (FAIR) Act would create a new Pennsylvania law. It would set rules for homeowners’ insurance claims arising from a defined disaster; its stated purpose is to provide fair assistance and insurance responsibility. The bill is introduced and is not law.

  • A policyholder filing a covered claim must give the insurer contact information for the policyholder or a designated contact.
  • The insurer must tell the policyholder how to use the Pennsylvania Insurance Department’s complaint process within 10 business days after receiving the claim.
  • An extension given to an insurer for investigating a covered claim would be null and void.
  • The bill applies to claims filed on or after it takes effect, which would be 60 days after the bill becomes law.

What it means for you#

  • Homeowners filing a disaster-related claim: You would have to provide contact information for yourself or your designated point of contact. The bill does not say what happens if you do not provide it.
  • Homeowners receiving a claim decision or service they dispute: The insurer would have to explain the Department’s complaint process and how to access it within 10 business days. This notice does not guarantee a particular complaint outcome.
  • Insurers: They would have to provide that notice and could not use an extension for investigating a qualifying claim.
  • The public: The bill does not create a new insurance office or front-line service. It refers to the Insurance Department’s existing complaint process.
  • What counts as a disaster: The bill covers specified catastrophes tied to federal disaster assistance or a request by the Governor for a federal disaster or emergency declaration.

Money#

No cost information is in the available material.

  • The bill requires insurers to provide a notice, but gives no estimate of the cost of doing so.
  • It does not set a fee, fine, benefit, or appropriation.

What is unclear#

  • The bill uses the definition of “investigation” in a state regulation, but that regulation was not supplied, so its meaning could not be checked here.
  • The bill does not set a replacement investigation deadline or explain how the loss of an extension would work with existing claim rules. The current rules were not supplied, so the change from current law cannot be confirmed.
  • It does not explain how the Department’s complaint process handles these claims or whether the Department must take any new action.
  • The bill says it takes effect in 60 days but does not specify the starting event in that sentence.
  • No publicly available information.

Case for#

  • The bill appears intended to make policyholders aware of a way to complain about unsatisfactory service or regulatory violations soon after filing a disaster claim.
  • A possible argument for removing investigation extensions is that it may prevent delays in resolving disaster-related homeowners’ claims.
  • Requiring a contact person could give insurers a clear way to communicate with the policyholder during the claim.

Case against#

  • One concern is that the bill removes investigation extensions without setting a new deadline or explaining how the change fits with existing claim rules.
  • The complaint notice requirement gives policyholders information, but the bill does not require the Department to investigate a complaint or resolve a claim by a set time.
  • It is unclear what happens if a policyholder does not provide contact information, or whether the insurer must take any further steps.
  • The bill’s effect on current procedures is hard to assess because the relevant rules were not supplied.