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ISSUED 12/22/2008 FOR IMMEDIATE RELEASE

INSURANCE DEPARTMENT GETS $7.5 MILLION BACK FOR CONSUMERS AND HEALTH CARE PROVIDERS IN THREE MONTHS

The New York State Insurance Department recovered $7,523,509 from insurance companies on behalf of consumers and health care providers from complaints resolved during the three-month period from September 1 to November 30, 2008, Insurance Superintendent Eric Dinallo announced today.

The Department’s Consumer Services Bureau receives approximately 60,000 new complaints annually and received more than 13,000 during this three-month period.

“Especially in these difficult economic times, when consumers need help with insurance issues they can turn to the Insurance Department,” Dinallo said. “Governor David Paterson has said he is committed to helping the most vulnerable among us, and helping consumers is a part of this core mission. Recovering more than $7.5 million for consumers and health care providers in three months is great news, but it is only one part of the story. Not every complaint results in a recovery amount. Getting an insurance policy reinstated for example, does not have a recovered amount associated with it, but is a victory for the consumer nonetheless.”

During the three months, 37 percent, or $2,734,574, of the recovered funds came from health-related complaints, 28 percent, or $2,112,917, from complaints related to property and casualty insurance, and 18 percent, or $1,384,900, from automobile and no-fault complaints. Other types of complaints represented 17 percent of the recoveries, or $1,291,118.

Four examples of the cases that contributed to the amount recovered are summarized below:

  • An individual undergoing chemotherapy for a malignant brain tumor found his health insurance coverage was being terminated for nonpayment even though his payment had been mailed in time. The insurer deposited the payment late, said the policy lapsed, and wanted the consumer to reapply for coverage. Because of the Department’s actions, the health insurance coverage was continued for the individual’s lifesaving treatments.

  • A consumer suffered a serious accident at home, resulting in a temporarily debilitating head injury and a hospital stay. She was not able to provide the hospital with the appropriate insurance information until her condition improved. Her insurer levied a 50% penalty because the member had not notified the company of the admission within 48 hours as required in the contract. After the Department’s intervention, the penalty was reversed and the claim paid in full.
  • A stolen car was recovered by police and impounded because it had been used in the commission of a crime while stolen. The owner’s insurance company told her that while it would pay for any necessary repairs after inspecting the vehicle, since the police refused to allow them to inspect the ‘evidence’, it could not settle the claim. The consumer, who continued to pay her automobile loan and insurance, asked the Department for help. After the Department stepped in, the insurance company paid the total loss value of the vehicle.
  • The driver of a van fell asleep, ran off the road, and struck two vehicles and a house. The owner of the house, who also owned one of the damaged vehicles, submitted his claims for damages to both his vehicle and the house to the insurer of the van. The van’s insurer denied the claims, stating the policy covering the van was canceled due to non-payment of the premium. The home owner filed a complaint with the Department. A close Department review discovered the insurer had not properly notified the Department of Motor Vehicles of the cancellation, so the coverage remained in effect to protect innocent third parties like the homeowner. At the Department’s direction, the insurance company paid the homeowner the full amount of the damages.

New Yorkers who need help with insurance issues, getting insurance information or filing a complaint should visit the Department’s website, www.ins.state.ny.us, or call 1-800-342-3736 toll free for assistance.

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