Many East Coast residents who thought their home insurance would come to the rescue after Superstorm Sandy haven't gotten a dime out of their policies for repairs.
Almost one in five Sandy insurance claims in New York has been closed without payment, according to the latest count by the New York State Department of Financial Services.
Of 397,160 Sandy-related homeowners, auto and business insurance claims filed in New York, 375,774 have been closed as of April 12. Of those, 71,948 -- 19 percent -- have been closed without payment.
The data are from
issued by the state on how insurance companies have responded to Sandy.
The storm was one of the costliest disasters in U.S. history, causing $50 billion in overall losses and $25 billion in insured losses, global risk management firm Munich Re estimated. Sandy made landfall in New Jersey in October 2012 as a post-tropical cyclone and brought heavy rain, wind, storm surge and snow, eventually affecting some 60 million people in 24 states. Storm surge along the coast from New Jersey to Massachusetts caused the worst losses.
The insurance claim denials in New York were largely the result of two things, according to a Department of Financial Services spokesperson:
- The loss was less than the policy's deductible.
- Claims were filed when there was no insurance coverage.
Sandy was mainly a flooding event, he said, and home insurance excludes flooding. In fact, some homeowners needed denials from their home insurance companies to apply for assistance from the Federal Emergency Management Agency.
To get coverage for flood damage, homeowners must have flood insurance. Policies are provided through the National Flood Insurance Program and sold by private insurers. Here's more on
who needs flood insurance.
Although floods are the No. 1 natural disaster in the United States, most homeowners don't have flood insurance, even in areas where it would seem like a no-brainer to buy it.