(DeWitt, New York, Feb. 26, 2013) — The Independent Insurance Agents & Brokers of New York told state lawmakers today that the insurance industry “did an admirable job” after Superstorm Sandy battered the New York City metro area last fall. A group spokesman also said that the federal government’s slow processing of flood insurance claims has tarnished the industry’s reputation.

Speaking before members of the New York State Assembly Insurance Committee at a hearing in Manhattan, IIABNY Secretary-Treasurer James D. Sutton praised the work of insurance companies and agents after the storm. “Many of those serving their customers were also personally impacted by the storm,” he said. “Yet, they put the interest of their customers first.” Sutton pointed out the grades in the disaster response report card established by Gov. Andrew Cuomo. Out of more than 389,000 insurance claims filed after Sandy, around one percent have generated complaints to the New York State Department of Financial Services.

Sandy swept up the eastern seaboard in late October 2012. Originally a Category 1 hurricane, it was at tropical storm strength when it made landfall near Atlantic City, New Jersey on the night of October 29. One of the most destructive storms in U.S. history, it caused billions of dollars in property damage and hundreds of deaths.

During his testimony, Sutton noted that a shortage of claim adjusters certified to handle flood insurance claims delayed payments to policyholders. The federal government’s National Flood Insurance Program (NFIP) provides nearly all of the flood insurance sold in the U.S. All claim adjusters handling flood insurance claims must be certified by the NFIP. Although the program sent certified adjusters from other parts of the country to the storm area, the volume of claims overwhelmed them. “This poor response for flood claims has tarnished the public’s view of the entire industry,” he said.

Sutton also addressed the future availability of homeowners insurance in coastal areas. He said that insurance companies should have more flexibility in the degree and timing of rate changes. He also supported tax reforms to encourage insurance companies to create reserve funds for catastrophes. Sutton acknowledged that large hurricane deductibles are necessary for companies to feel that they can afford to insure homes on the coast. However, he also said that all companies should use one uniform definition of the event that would trigger those deductibles. He cautioned that the companies need assurance that they will be able to apply these large deductibles for events that trigger them, but also said that consumers should have the option of obtaining smaller deductibles for an additional premium.

James Sutton is also the owner of James F. Sutton Agency, a 50-year-old family-run independent insurance agency in East Islip, New York.