Now that the power is finally back on for millions of American homes and businesses affected by Superstorm Sandy, homeowners and flood insurance claims are pouring in at a record pace. Consumers and businesses alike need to be aware that insurers are going to do everything possible to minimize their losses, and it is likely that a large number of claims will be sharply reduced or denied outright.
Homeowners’ insurance companies have gotten tougher as weather has become more extreme. As New York Governor Andrew Cuomo said, “It seems we are having a hundred year flood every two years!” In response, insurers have raised rates, carved out some coverage, and tucked in new wind and hurricane exclusions and deductibles. Unlike regular deductibles that require homeowners to pay a set deductible of $500 or a $1,000 dollars, for example, hurricane deductibles are typically based on a percentage of the property’s value. In other words, a policyholder with a house worth $400,000 and a hurricane deductible of 5% may have to pay the first $20,000 dollars in damages before insurance payments will kick in.
Fortunately, Governors Chris Christie of New Jersey, Dannel Malloy of Connecticut and Cuomo of New York have been clear that Sandy did not make landfall as a Category 1 hurricane. It seems that the insurers agree. According to Robert Hartwig, President of the Insurance Information Institute, Sandy’s sustained wind triggers were not met and all policyholders should be exempt from their insurers’ hurricane deductibles.
There are still many other pitfalls, though, which could derail the processing of your Sandy related claim. For instance, many insurers now have “anti-concurrent causation clauses” (try saying that three times fast) that state if damage occurs from multiple causes, such as wind and flooding, and only one cause is covered, the policyholder gets nothing at all. Ouch!!
The bottom line is that insurers and policyholders are about to engage in an epic battle relating to the payout of over $20 billion of insured claims from damage caused by Sandy. As a result, it seems that a “Sandy” mountain of litigation can’t be far off. If your homeowners’ insurance claim has been denied, contact the experienced attorneys at The DiGeorge Life Insurance Law Firm for a free consultation.