Hurricane Sandy: Am I Covered by My Insurance?

In the wake of Hurricane Sandy, many people are anxious about property damage they may have suffered and whether or not their insurance companies will pay for their losses. USA Today reports, “For some homeowners, the biggest shock will be that damage from flooded creeks and surging seas isn’t covered by most property insurance. That’s the realm of flood insurance, which is handled by the government.”

The Washington Post points its readers toward the government website FloodSmart.gov, which also explains that most homeowners’ insurance does not cover flooding, and points out that “[j]ust a few inches of water from a flood can cause tens of thousands of dollars in damage.” The Post goes on to claim, “From 2007 to 2011, the average residential flood claim amounted to almost $30,000.”

USA Today warns that even homeowners who have flood insurance included in their policy may not always be covered: “For example, in below-ground basements, policies typically cover only boilers and other equipment that serve the living area – not furnishings or other belongings.” This is a much-argued issue, and what is covered by one’s insurance policy is often disputer. Examples of this include items that are neither belongings nor parts of the structure of the house – i.e. appliances such as hot water heaters or boilers. There is often much confusion surrounding who covers what between federal flood insurance and one’s own insurance company.

As mentioned in the last post (and as noted in the USA Today piece), many of those who lost their homes will face added costs due to stricter building standards regarding weather- and flood-proofing. In cases like this, homeowners’ insurance policies may not cover these additional costs.

The article goes on to suggest several tips for those affected by the storm:

• Report your claim as soon as possible. Insurers generally handle them first come, first serve.
• Write down your claim number. Insurers use this to locate your file.
• When an adjuster surveys damage, find out if they are employed by your insurer or whether they’re independent. If independent, ask if they’ll be making decisions on your claim or whether they’ll be done by a company adjuster.
• Keep good records. Start a notebook for names and phone numbers. Keep a log of conversations and meetings with insurance officials. List dates and times and include brief descriptions of exchanges. This will be helpful if you need to complain later.
• Inventory your damaged possessions. If you didn’t take pictures before the storm, see if you have any previous photo that could be helpful in assembling an inventory.
• Get a repair estimate from a trusted local contractor to use as a guide in talking with the insurance adjuster. Keep receipts from emergency repairs and any costs you incur in temporary housing. They may be reimbursable.
• Watch for “anti-concurrent-causation” clauses in policies that, insurers allege, remove coverage for wind damage if a flood happens at about the same time. The Consumer Federation of America says these clauses are ambiguous so if an insurer uses one to deny your claim, read the provision carefully.

On November 26, NJToday.net reported that officials from the New Jersey Office of Emergency Management (NJOEM) and the Federal Emergency Management Agency (FEMA) “are urging individuals affected by Hurricane Sandy to apply for assistance even if they have insurance.” Both organizations suggest that those affected by the storm should visit disasterassistance.gov or call 800-621-FEMA.