NEW YORK Oct 29 For some homeowners, the
aftermath of Hurricane Sandy could bring a whole second round of
troubles. After the storm passes, they may have to negotiate
with their insurers to get the cash they need to repair wind and
Homeowners' insurance companies have gotten tougher as
weather has become more cataclysmic. (here).
They've raised rates, carved out some coverage and tucked in
new wind and hurricane exclusions and deductibles.
Homeowners need to play the game right if they want to get
claims paid quickly and thoroughly. You can start early - here's
what to do now and later.
FIND YOUR POLICY
If you've got your flashlights loaded with fresh batteries
and your water bottles in a row, dig out your homeowner's
insurance policy and see what kind of coverage you actually
have. You may be unpleasantly surprised: After Hurricane Irene
hit in August 2011, more insurers tucked hefty wind and
hurricane deductibles into their policies. They run 2 percent to
5 percent of the insured value of your home, says Charles Hahn,
an insurance agent in Little Falls, New Jersey, where "we're
known for flooding a lot."
Keep in mind that many insurers have "anti-concurrent
causation clauses" in policies now that say if you have damage
from multiple causes, say wind and flooding, where wind is
covered but flooding is not - they won't cover anything at all.
A new flood insurance law passed this summer requires
insurers to use federal data to allocate the costs in cases
where a home is totally destroyed by flooding and wind damage.
Homeowners who live near the shoreline do tend to have
federal flood insurance; their mortgage lenders require it. But
Hahn says he saw an uptick in inland purchasers after Irene.
Nationally, some 5.65 million federal flood insurance policies
were in place at the end of 2011 - that represents a 17 percent
increase over the previous year, according to data from the
Insurance Information Institute.
That's good, because so much rain fell during Irene that
basements flooded in neighborhoods far away from rivers and
streams. The same - or worse - is expected this time around.
Even if you don't have flood insurance, you might have extra
protection from water damage if your insurance policy covers
failure of your sump pump, says Richard Cohen, a property loss
consultant at Clarke & Cohen in Bala-Cynwyd, Pennsylvania. This
kind of coverage is generally included in some high-end
homeowners' policies, although other policies may offer limited
One silver lining: If the water rises so high in your
neighborhood it floods your car, you're probably covered by your
comprehensive auto policy, reports the Insurance Information
TAKE PICS - NOW AND LATER
While you are waiting for the storm to hit in earnest, take
your camera phone around your house and inventory all of your
belongings, says Bob Hunter, director of insurance for the
Consumer Federation of America.
Even better: video. "You can actually see everything before
and after," Cohen says.
If your home is damaged, document it carefully before you
move anything and get images as soon as possible. "When things
dry, they can look a lot different," Cohen says.
Leave the damage as it is until an insurance adjuster
arrives on the scene, if possible. However, Sandy is expected to
hit a wide swath of the Northeast, so an adjuster may not make
it to your home for a few weeks. "It all depends upon how
significant the power outages are," notes Cohen. Keep all
damaged items until the adjuster has had a chance to look at
EMPTY YOUR BASEMENT AND FRIDGE
Even if you have flood coverage, you may be disappointed to
learn just how little it will cover. You're protected for
structural damage and the cost of replacing basement utilities
like electrical panels and heating units, Hahn says. But all the
precious items you have stored downstairs? Not so much. Might as
well haul them upstairs now if you're worried about a wet
Homeowner Richard Dukas, a public relations executive from
Teaneck, New Jersey, could see the floods from Irene coming and
saved all of his possessions from his basement. He had flood
coverage. He still ended up getting only $10,000 back from the
insurance on $15,000 worth of damage.
Most homeowners' policies do cover the cost of food that
spoils when the power goes out. But if that's your only loss, it
will be subject to your policy's deductible of $250, $500 or
more. That means that unless you have a large freezer full of
meat or priceless truffles, you may not find it worth filing
FILE CLAIMS PROMPTLY
You may get faster attention if you submit a claim
quickly. "Homeowners who get in line first have a better chance
of recovery than those who make claims quite a bit later,"
observes Linda Kornfeld, a Los Angeles attorney with Jenner &
Block who represents consumers and business owners in cases
against insurance companies.
Federal flood insurance typically carries a 60-day deadline,
though it often gets extended after extreme events. Miss that
deadline and your flood insurance will be worthless.
CHOOSE YOUR WORDS CAREFULLY
Call your insurer as soon as you see damage and let them
know if you need to spend money to make immediate repairs, says
Kornfeld. But don't characterize the cause of the damage - the
company could dredge up your remarks and use them to deny your
claim. So, for example, say: "My window is broken, and there is
water on my dining room floor and I am going to buy plywood to
cover the window." Don't say: "Wind broke my window and my
dining room flooded."
Hire an emergency services company to dry everything out and
dehumidify the area. Some big national chains include Servpro
and Belfor. They'll bring in equipment, such as special fans, to
get things dry again. Getting your stuff dry is really important
because mold can be an even a bigger headache than flooding.
"Insurance policies have limitations for mold," Cohen warns.
Check with your insurer before laying out large amounts of
money for repairs, though. It may refuse to pay. They typically
will pay small amounts for immediate fixes, such as a tarp to
cover that gaping hole in the roof. Of course, keep all of your
GET A ROOM, BUT KEEP TABS
If you move into a hotel because your house is without
power, that's on you. However, most insurers do cover hotel
stays if your house really is uninhabitable, thanks to a gaping
hole in the roof or a tree in your bedroom, for example. You may
also be covered for meals and hotel stays if local or state
authorities had a mandatory evacuation of your neighborhood.
If you need to leave your house because it is flooded, don't
expect the same coverage. Federal flood insurance doesn't cover
hotel bills and the like, according to the Insurance Information
KNOW THE RULES OF YOUR STATE
What the storm is called when it hits your house will affect
your coverage, depending on your state of residence. If you are
in New Jersey, for example, and the storm hits as a hurricane on
the coast, but downgrades to a tropical storm by the time it
hits your house, the higher hurricane deductible may still apply
to your claim. "It was applied state-wide in Irene," Hunter
For some homeowners, that could be the final battering
delivered long after the winds have died down.
(Reporting by Lauren Young, Linda Stern, Chelsea Emery and Beth
Gladstone; Editing by Claudia Parsons)