Hurricane Sandy Claims

hurricane sandy claimsWith millions and millions of homeowners affected by the high winds and floods of hurricane Sandy, the run is on to capture the finite amount of resources that will be allocated to rebuild after the superstorm that was Hurricane Sandy.  The bulk of Hurricane Sandy claims will be property claims for wind and flood damage.  While one estimate for Hurricane Sandy damage was $80 billion, Hurricane Sandy property damage claims are expected now to top $50 billion.  Many are asking: where is the money going to come from to rebuild?  The answer to that question will depend on the type of damage and type of claim made by the insured, if insured.  The money to pay Hurricane Sandy claims will come primarily from private insurers, government agencies and from individual homeowners themselves.

Hurricane Sandy and Homeowner Claims

Estimates from the Consumer Federation of America show that private insurers will probably contribute only about 40% of the funds needed to rebuild in the wake of Hurricane Sandy.  This number sounds surprisingly low when one considers the fact that all homeowners must carry private insurance if they have a mortgage on their home. But, that said, many private insurers do not provide coverage for flood or hurricane damage.    Some of the flood damage will be covered by the National Flood Insurance Program.  But, with flood damage claims
expected to top $10 billion which more than doubles the National Flood Insurance Program’s $4 billion in authority to make payments on claims made by homeowners who suffered flood damage from Hurricane Sandy.

As many know, Hurricane Sandy was downgraded from a ‘Hurricane’ to a ‘Superstorm’ just before it made landfall in the northwest.  Many may not currently understand how fortunate this downgrading was for their pocketbooks.  Most, if not all, insurance policies for hurricane coverage on residences and commercial policies have large deductibles that must be covered by the property owners themselves.  Depending on the amount of the Hurricane Sandy property damage claim, some property owners could have been forced to spend tens of thousands of dollars of their own money to rebuild as deductibles for such insurance coverage claims can be a percentage of the total claim.

Hurricane Sandy and Deductibles

On Wednesday, New York Governor Andrew Cuomo made a shot across the bow of private insurance companies reiterating the point made by meteorologists that Hurricane Sandy winds never reached hurricane strength once the storm made landfall in New York.  Governor Cuomo said simply, “Homeowners should not have to pay deductibles for damage caused by the storm and insurers should understand the Department of Financial Services will be monitoring how claims are handled.” This simple fact could ease the burden for homeowners to the tune of millions, if not billions, of dollars monies that will not have the paid out of the homeowners pocket in the form of deductibles that exist in most policies.

Many people are wary of personally dealing with their insurance company, they want to make sure that they get the full amount of their claim paid.  The best thing a homeowner can do is document their claim as best they can.  If you think that your insurance company is giving you the run-around, consult an attorney to advise you on how to proceed.

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