NY Policy Holders’ Protection Act


New York Insurance Consumers Desperately Need Protection…Once and for All!

Update on Bill numbers and sponsors here. Please, spread the word and support our efforts!


Learn about the victims that would have never have suffered if this bill had been enacted into law by watching this:


Updated PPA Brochure

Meet those people who would have benefited by the PPA!

NY is one of only 3 States that leave their consumers unprotected! Read here!


Policyholders who pay insurance premiums should expect insurers   to live up to their policy obligations. Currently, insurance companies routinely deny consumers the benefits of  the  policy  they  purchased, misrepresent policy  coverage,  and  undervalue  claims. It has also been widely reported that some insurance company experts’ opinions and reports have been falsified and conclusions changed to favor a claim denial to the prejudice of the premium paying public on a massive scale. This activity is so widespread it has resulted in reopening 144,000 Sandy claims.

The purpose of the Act is to protect New York policyholders by holding their insurance companies responsible for refusing to pay or unreasonably delaying property damage claims. The Act uses a fair and balanced approach while discouraging expensive litigation.


The Act will allow a  policyholder  who  meets  the  standards  provided under the Act to recover (in addition to their claim payment):

Compensatory Damages

Consequential Damages

Reasonable Attorneys’ Fees

Punitive Damages

(Capped at two times the value of the covered loss)


The consumer can recover under the Act if he or she can prove that the insurance companies’ refusal to pay or unreasonable delay in payment were not substantially justified. The insurer is not substantially justified under the Act when it:

  1. Intentionally, recklessly or by gross negligence failed to provide the policyholder with accurate information concerning policy provisions relating to coverage at issue; or
  2. Failed to effectuate, in good faith, a prompt, fair and equitable settlement of a claim submitted by such policyholder in which the liability of such insurer to such policyholder was reasonably clear; or
  3. Failed to provide a written denial of a policyholder’s claim with a full and complete explanation of such denial, including  references to specific policy provisions wherever possible; or
  4. Failed to make a final determination and notify the policyholder   in writing of its position on both the liability for, and the insurer’s valuation of a claim  within  a  reasonable  time  not  to  exceed  six months from the date on which it received actual or construction notice of the loss upon which the claim is based unless the loss exceeds one million dollars; or
  5. Failed to act in good faith,  compelling  the  policyholder  to initiate a lawsuit to recover under the policy by offering substantially less than the amounts ultimately recovered in the suit by the policyholder; or
  6. Failed to promptly proceed with the appraisal process once demanded pursuant to the policy in any claim where coverage for a portion of the loss has been accepted by the insurer, where there exist issues as to the value of covered property or amount or extent of the covered loss.



  • The Act caps punitive damages at two times the  actual  covered loss, limiting the exposure of the insurer while still  providing  financial incentive for fair claims practices.  Such  a  cap  removes  any due process or fairness issues.
  • The Act requires the consumer to give the insurance company and the Department of Financial Services notice of the consumer’s complaint(s) 60 days prior to the commencement of litigation as a condition of recovery. This will guarantee an opportunity for the insurance company to correct the problem without litigation or bad faith exposure. This “civil remedy notice” has worked very successfully in the state of Florida.
  • The Act discourages costly and time consuming litigation by encouraging the use of the “Appraisal” process.
  • The Act prohibits  the  insurance  industry  from  raising  premiums  as a result of awards for damages provided for in the Act forcing shareholders to take responsibility for the misdeeds of the insurer.
  • The Act incorporates other procedural and evidentiary safeguards to avoid abuse by either side, such as:
    • bifurcating trials to avoid prejudice to the insurers.
    • extending the policyholder’s time to sue while the civil remedy notice is pending in an effort to avoid unnecessary litigation and expense to both parties.
    • defining rules of the admissibility of evidence regarding claims practices to ensure a fair and complete record.


The Insurance Industry Argues: “If the Act becomes law, premiums will go up costing consumers millions.”


The Truth: Section 2601a(e) of the Act states: “All amounts recovered from an insurer…in any action authorized by this section shall be excluded by the insurer in its determination of the premium it will charge all policyholders.”


The Insurance Industry Argues: “If the Act becomes law, the industry will flee the market in New York.”


The Truth: First, current law prohibits an insurance company from not renewing more than 5% of its policies in one year. So even if an insurer chose to leave the New York marketplace it would take many years for the carrier to do this. Experience tells us that in the states where such laws exist, the insurance market is healthy and thriving.


The Insurance Industry Argues: “Consumers can already recover attorneys’ fees based upon current law so no change is necessary.”


The Truth: Unfortunately, the courts that have considered the issue  in New York have held that the right to attorneys’ fees due to bad faith claims practices does NOT exist. Sukup v. New York State, 19   N.Y.2d 519 (1967); New York University v. Continental Insurance Company, 87 N.Y.2d 308 (1995); Rockonova v. Equitable Life Ins. Society of the United  States,  83  N.Y.  2d  603  (1994).  There  are but one or  two examples  of  attorneys’  fees  being  recovered  in  the long history of  New  York  State.  The  industry’s  argument  is  also  disingenuous as insurers routinely argue the contrary position  in all litigation where it is raised.


The Insurance Industry Argues: “Consumers have the Department of Financial Services to protect them.”


The Truth: First, as illustrated by the stories told by victimized consumers, current protections have proven entirely inadequate and have allowed the problem of bad faith claims practices to flourish. Second, in a detailed study done by R Street entitled “2015 Insurance Policy Study No.  31”  (December,  2015),  New  York’s  Department  of Financial Services and the other State Insurance Departments were evaluated to determine which states do the best job of regulating the business of insurance. Sadly, New York’s Department of Financial Services received a grade of “F” for 2013 and “D” for 2014 and 2015, making it the 48th worst state out of 50 for protecting consumers in 2015. (Down from the 46th worst in 2014). The Department routinely responds to consumer complaints by stating “…the complaint appears to raise questions of fact and law and such matters can only be decided by a court of law,” and these consumers are rendered defenseless as they are unable to enforce the current law. The truth is the  DFS  cannot  protect  consumers,  and consumers cannot protect themselves.



The Insurance Industry Argues: “Should the Act become law,  it   will increase litigation and is a boon to the ‘trial lawyers.’”

The Truth: Section 2601-a(5) of the Act makes it illegal for carriers to force needless litigation. Section 2601-a (6)(c)(1) of the Act guarantees the insurer two months to correct the problem and do the right thing before suit under the Act is even possible. Reports from around the country establish that bad faith legislation has resulted in reduced litigation.

This Bill will change lives of insureds and revolutionize the insurance industry! Let’s push Albany to pass this legislation which will hold insurance companies responsible when they adjust claims in bad faith!

Listen here to the Bob Salter show on WFAN from Sunday. The topic was our Bill, and you can learn all about it!