November 6, 2012 — In the weeks and months following Hurricane Sandy, one of the most costly and devastating storms ever to hit the northeastern United States, hundreds of thousands of insurance claims will likely be filed.
Many will be denied, delayed, or unfairly under-compensated. Of the estimated $50 billion in economic costs, approximately $10-20 billion is insured. It is likely that insurance companies will receive about 20,000 claims of flood damage and 200,000 claims for wind damage. These claims may exhaust available funds.
According to the Consumer Federation of America, flood insurance claims will likely be $8-10 billion. Most of these claims go through the National Flood Insurance Program (NFIP), which is authorized to pay about $4 billion in flood insurance claims. The federal government can loan out an additional $1 billion through the Federal Emergency Management Agency (FEMA), on authorization from President Obama. However, it is highly likely that the cost of the claims will exceed available funds.
As individual homeowners’ insurance companies face an onslaught of claims and possible fund shortages, it is likely that many homeowners will see their claim denied, delayed, or unfairly compensated.
If this happens to you, experts recommend that homeowners should ask their insurance company why their insurance claim was not compensated fairly. It is also important to document all conversations you have with your insurance company — including the content of the conversation, name of the insurance agent, time, and date. This information will be vital to protecting your claim if you decide to hire a lawyer. Once the insurance company gives you a reason for denying your claim, they are locked into that answer.
Consider talking to a Hurricane Sandy insurance lawyer if your claim is being handled unfairly or not being compensated. It is possible that you are entitled to tens of thousands of dollars more than your insurance company has offered to pay.
Some insurance companies may ask you to pay a hurricane deductible (homeowners usually must pay 1-5% of their home’s value before the insurance company pays for the damage). However, government officials in New York and New Jersey have clearly warned insurance companies that homeowners should not pay hurricane deductibles because Hurricane Sandy was downgraded to a post-tropical cyclone just before it reached land.