NY Victims' Families Bill Could Cause Insurance Cost Spike

Law 360
Monday, August 22, 2022

As New York's Grieving Families Act awaits the governor's signature, some experts said insurance costs could potentially increase in the Empire State due to the bill's allowance of recovery by extended family members for emotional damages such as grief or anguish.…

Professor Joanne Doroshow, founder and executive director of the Center for Justice & Democracy and co-founder of Americans for Insurance Reform, agreed the insurance industry has repeatedly threatened policyholders with higher premium costs whenever there is a new law holding insurers accountable.

Rather, the economic cycle drives insurance rates, Doroshow said, noting that her institute's studies show an up and down effect over the past five decades. If insurers claim financial hardships and can't pay claims then Doroshow said New York lawmakers should demand to see data that backs the assertions.

"The insurance argument is fraudulent," she said. "That is the history of the tort reform movement."

The bill's proponents emphasize that the Grieving Families Act brings New York up to date with other states in regard to allowing recovery for emotional damages in wrongful death lawsuits.

Shulman of Lewis Brisbois said it looks fair to be paid for pain and suffering but it's easy for the bill's proponents to forget New York doesn't have a statutory damages cap. In jurisdictions such as California and Florida, he noted, many tort cases such as medical malpractice cases have statutory caps on damages.

"The problem is that there is no cap on statutory damages. A passionate plaintiff can convince a jury to award exorbitant damages to a decedent's estate, which may ultimately flow to the plaintiff anyway. Permitting a plaintiff to recover for pain and suffering may create an unfair windfall," he said.

Doroshow said the bill is important because current law, which limits access to noneconomic damages, discriminatorily impacts racial minorities and low-income individuals.

"We're talking about terrible hardships not only for families with horrific nursing home stories but also other areas where people are wrongfully killed," Doroshow said. "Whatever hardship the insurance carriers are threatening is nothing compared to the hardships of these families."

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