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.
Residents 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.
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.
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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.
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.
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!
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.
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.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.
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