NY Bad Faith Bill Could Be a Game Changer for Policyholders and Injured Third-Parties

New York

New York courts have often been the venue of choice for insurance companies across the country to litigate their coverage disputes, because of the States laws that tend to favor the insurer.

Many of the attorneys that represent policyholders will tell you that the reason for that preference, is that unlike other states such as Florida, California, or Washington, New York does not provide policyholders with a private-independent right to file an action against insurers, apart from a breach of contract claim, or to file suit against their insurers for delaying the resolution of their claim or acting in bad faith.

In New York, the job of regulating an insurer’s conduct is left to the New York Department of Financial Services, a body the attorneys say insufficiently addresses the needs of the Policyholders and effectively places them at a disadvantage because of the insurers’ vast resources at their disposal, that effectively turns litigation into a David v. Goliath scenario.

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However, there are people like New York State Sen. Jessica Ramos who have recently sponsored a bill that would provide policyholders and injured third parties, with an individual private right to file suit against insurers for conduct and behavior that amounts to bad faith.