New York Legislators Take Aim at ACC Clauses

The New York State Assembly’s insurance committee on May 23 approved a bill that would prohibit the insurers’ use of anti-concurrent causation (ACC) clauses in the state.

The bill, A07455, was introduced by Assemblyman Phil Goldfeder on May 17. It is eligible to be voted on by the Assembly following the committee’s approval, though it could be amended going forward.

“In the aftermath of Superstorm Sandy, many homeowners were surprised when insurance companies denied their claims for perils that should have been covered under the policy (such as windstorm damage) because the perils occurred at the same time as a flood, which is excluded under most homeowners policies,” according to the bill’s memo. “This bill would rectify this by prohibiting insurance companies from denying claims under these circumstances.”

There are currently four states — California, North Dakota, West Virginia and Washington — that have either statutes or reported decisions that eliminate or limit application of ACC clauses, said William Krekstein, a partner at law firm Nelson Levine de Luca & Hamilton.