Good insurance news: Northeast wasn't hit by a hurricane

The declaration that Sandy was a tropical storm means many residents of the Northeast will pay lower deductibles on insurance claims.

By Teresa at MSN Real Estate Nov 2, 2012 9:05AM

Julio Cortez/APResidents of New York, New Jersey, Pennsylvania, Connecticut and Maryland may be surprised to find out they were not hit by a hurricane just before Halloween.

 

Sandy was a "post-tropical cyclone," with sustained winds of less than 74 mph, when it came ashore Oct. 29. The distinction is important because it means that people who suffered storm damage to their home will pay the regular deductible for their insurance claims, not the higher hurricane deductible.

 

Most homeowner insurance policies set a deductible for regular losses at a set amount, usually $500 or $1,000. Many policies in coastal states set a deductible that is a percentage of the home’s value as the deductible for claims stemming from a hurricane.

 

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So if your hurricane deductible is 5% and your home is worth $500,000 -- not unusual in the hard-hit areas -- you could find yourself responsible for paying the first $25,000 for repairs.

 

While Sandy was a hurricane for most of its trip up the East Coast, it had lost hurricane strength by the time it hit the Northeast. (The distinction doesn’t make any difference for North Carolina, where the higher deductibles are triggered by "named storms.")

The declaration of non-hurricane status was made by governors or other officials in the affected states after the National Weather Service ruled that Sandy was not a hurricane when it came ashore.

However, the distinction may not be quite as clear-cut for all homeowners. Some homeowners have a separate wind deductible as opposed to a hurricane deductible. Each state has its own rules. Plus, each insurance policy has its own fine print.

The Insurance Information Institute has answers to some questions about storm coverage. U.S. News & World Report also has some guidelines if you want to prepare now for future damage.

 

One tricky insurance distinction is going to be a lot more difficult to parse: Was damage caused by wind and rain or by flooding? Damage caused by wind and rain is covered by homeowner or windstorm policies. But to be covered for flooding, homeowners need a separate flood insurance policy. Homeowners who suffered damage from both wind and flooding may find themselves in arguments with their insurance company or in court.

 
73Comments
Nov 10, 2012 11:49AM
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I guess the weather service does what they are told, first they tried to ruin the Republican convention with BS prognostications, now they are trying to save Fatso's state from paying deductibles, I guess that is why the Gov. of NJ kisses POTUS butt. Chriti sold out the country and the Republican party and Mitt for trying to get reelected. He must have got word from the DNC that Mitts numbers were not good.
Nov 10, 2012 10:05AM
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I am still waiting for assistance from Hurricane Irene.
Nov 10, 2012 9:01AM
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When people need help they should get it!!!  you people complain to much.  Your turn will come when u need help, should no one help you??  complain, complain, complain why do u complain, does it make u feel good? go out there and help it will make u feel better and give u something to feel good about.  

Sure big companys like insurance companys screw us all.  They will get there turn...dont worry.....what goes around comes around.  

Just be happy and grateful, what matters the most is people!!!!!! 
Nov 10, 2012 8:55AM
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Sandy was downgraded on Oct 27th by the National Weather Service; two days before it made landfall.  Obviously insurance was not a determining factor at this point.  Please keep your ignorance to yourself.
Nov 10, 2012 8:25AM
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This looks like a clear cut case of Insurance Fraud to me!  Trying to call a Hurricane a Tropical Storm does not make it one! 
Nov 10, 2012 8:01AM
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My insurance company has a clause which states 'Hurricane coverage starts when the National Weather service announces a Hurricane Warning and ends 24 hours after the warning is cancelled."
Can I get the Government to nullify this clause so I can get some relief also?
Nov 10, 2012 7:36AM
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Does anyone realize that we are 1 country made up of 50 states? No wonder this country is being ruined from within. I see a lot of comments about hating the states where this storm hit but if your state was hit you would be screaming somebody help me. Hipocrits.
Nov 10, 2012 7:11AM
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People, please check the time the gas was given free and the vote time that was made.  Stop assuming that these people got free gas for their vote.  You are americans, not living in 3rd world countries where this does take place.  Start being american and work alongside of your fellow americans, help them out, you may also need this one day.  If everyone is so critical of the way insurance companies handle each area, bombard your congress and senate and demand change to these unscrupulous workings of the insurance companies, all are being allowed to do this because of government regulations, or non-regulations.  It is up to the people to stand united not divided and demand change  You know what happens when you stand together, no one payingthe insurance companies, you will see change, but until you stand truly together, and they are allowed to continue, you will see no change, don't blame your fellow americans; however, you can do something by demanding your government officials who are getting paid in the back, you can be sure, you must make them understand where you are coming from.  Stand united and stop wasting time blaming your fellow amerians, blame big business, insurance companies, last but not least your government who controls all of this.
Nov 10, 2012 7:07AM
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The governor declaring that sandy was not a huricane is a complete joke. I work in insurance and this will be a disasater for everyone in the end.   Also, while I feel horribe for the homeowners losses, and see how wonderfull it is that they pay the lower deductble, I also warn that the insurance companies will be put under such finanancial stress over this, that they will probably see many insurers going under, leaving, and raising rates in the future. I live in Florida so I have lots of experience with this. Paying only $500 or $1000 deductible for a loss of this kind is just not sensible.

Nov 10, 2012 6:58AM
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on and on the goverment will bail all these goverment and union people out
Nov 10, 2012 6:56AM
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PW Johnson

Thanks for not coming to the Northeast! We dont need people like you up here!

Nov 10, 2012 6:46AM
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It's sad how some people can hate others and call them Turds without even knowing them. I'm sure you have neighbors who would screw you in an instant if given the chance and equally sure there are "Turds" on Staten Island who would give you a helping hand if needed. Try growing up.

Nov 10, 2012 6:20AM
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Seeing the Turds on Staten Island being ravaged was funny.  Watching their interviews on the news just showed their East Coast attitude and why I have no desire to go to New York or any of the Northeast.    
Nov 10, 2012 6:10AM
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I live in the New Orleans area. I have to say, I was devastated and cried for  weeks. My only son lost the home he had purchased the year before. You people that have never experienced a Hurricane, should keep your mouths shut. I have been paying into the "Citizens Insurance " for over 7 years,even though I live in central Louisiana now. It became a state law that every Louisiana homeowner has to pay it, no matter who their insurance company is. We did not get the option not to pay our deductible, because sadly Katrina was a Hurricane. Over 2000 people lost their lives. Even 1 life is too many. I send my  prayers to New Jersey, know this, it takes time, but you will recover.

Nov 10, 2012 6:06AM
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These are not the droids your looking for, move along, move along !

So whats next the folks out west don't have wildfires anymore just flamable forest fog?!!!!

Or the People in New Orleans don't get flooed anymore they just have a moisture encroachent??

 My car wasn't stolen is was just relocated by a friend I never met while he showed me his firearm??

 

Man this rabbit hole is deep!

Nov 10, 2012 6:05AM
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I cannot believe what I am reading!  Unless you have been through it you have NO idea what these people are going through.  I survived Katrina across the lake from New Orleans.  We received a 26 foot storm surge, not a levee break.  We lost everything, went through hell with FEMA, insurance companies and contractor.  For those of you who have not lived through it, a tropical storm, depending on the way it comes in and how long it stays over your area, can cause a tremendous amount of damage.  A recent example is Issac, a Cat 1.  Again, if you haven't been through it you have no idea what these people are going through and should keep your uninformed comments to yourself!  God Bless these people.  It will be a long time before life is back to normal for them, if ever.

P.S.  The reason it was considered a superstorm was because it was heading into a nor'easter.  It had nothing to do with the storm's category rating.

Nov 10, 2012 5:49AM
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It is rather funny. You could look at it many ways. The storm was a hurricane all the way to the minute it hit land. Its not like the weather was great in NY and Jersey one minute and the next minute the storm was there. Hurricanes beat you up on the way in and continue to beat you after it hits land and weakens. The issue likely wouldnt of even occured if the storm wasnt barely a Cat1 hurricane as it approached. Anyways, im sure anyone in the position of those benefiting from the "downgrade" would gladly accept it. Theres not much reason for others to channel their anger towards the people benefiting. Just expect a lil' higher premium now in the Northeast.
Nov 10, 2012 5:39AM
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why Sandy was EVER referred to as a super storm is way beyond me!!!  The reason those areas took so much damage is because they were not prepared... just be thankful Sandy was NOT a real super storm category 5 
Nov 10, 2012 5:34AM
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Much of the damage was done by flooding and that’s not covered by homeowners insurance. Most of the people in that area do not have flood insurance, so much of the damage will not be covered by any insurance.

 

The folks up there, however, will get hit by the insurance companies. After the 2004 – 2005 storm seasons many people in Florida received non renewal notices as insurance companies stopped offering homeowners insurance in the state.

 

The few that remained raised prices significantly, so people who were paying $400 - $500 a year were now having to pay that amount each month as rates increased 1000% over night.

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