Sandy Victims in New Jersey Shortchanged by Flood Insurance File Suits
Many victims of Superstorm Sandy who live in New Jersey are claiming they have been short-changed by flood insurance companies, with the average policyholder receiving less than $50,000 after filing claims. The claim payments are far less than those received by Gulf Coast victims of Hurricane Katrina, and even less than New York victims of Hurricane Sandy, according to data from the Federal Emergency Management Agency. Two Types of Insurance Homeowners have two types of insurance that covers damage to their homes. Policies purchased from private insurers normally pay for damage by fire, wind, rain or trees, while flood insurance covers damage caused by floodwaters. Flood insurance is sold by private insurance companies but financed by the federal government. The average flood insurance policy costs homeowners $650 per year, according to FEMA reports, and provide up to $250,000 to repair damage to buildings, as well as $100,000 to replace the contents of a home. Sandy Horror Story Carla and Vincent Vitale, who owned an oceanfront home in Point Pleasant Beach, N.J., which was valued at $2.3 million prior to Hurricane Sandy, had a $250,000 flood insurance policy as well as a homeowner’s policy. By their estimates, the policies have cost the couple almost $100,000 over the 12 years they have owned the home. After the storm, the Vitales returned home to find 29 inches of water in the crawlspace and a foot of water in the garage. The water had destroyed the heating and electrical systems, and caused extensive damage to the floors of the home. A FEMA adjuster arrived a week later and said that the damage to the home was not caused by floodwaters, a contention confirmed by an independent engineer hired by the Vitales. The couple then turned to their homeowner’s insurance. Three separate adjusters from the insurance company visited the home. The first claimed damages in the amount of $60,000, but a second adjuster lowered the amount of damage to $10,000. A few weeks after they received the $10,000 check, a third adjuster arrived, claiming damages were only $4,700, requiring the couple to return to FEMA in order to get enough money to repair their home. FEMA Explanation According to FEMA, the reason New Jersey residents are being offered lower amounts for their claims is that New York had a greater storm surge which caused more significant damage. In addition, construction costs are higher in New York than New Jersey. Katrina was the costliest storm in United States history, taking out more expensive real estate than Sandy. According to officials, the properties damaged in New Jersey were smaller, second homes whose replacement value is less than $150,000. Residents of New Jersey, however, find the explanations unsatisfactory, and more than 600 lawsuits have been filed against flood insurance companies, claiming that homeowners were not reimbursed the amount that was owed. When insurance claims are not paid in full or are denied improperly, a liability claim may be in order. Contact Dallas-Fort Worth lawyers at Frenkel & Frenkel to schedule a free initial consultation regarding an insurance claim that has been improperly handled.