Hurricane Sandy didn’t serve up hurricane-force winds in Connecticut, despite the storm’s name, and that means that homeowners filing insurance claims won’t have to face much more expensive deductibles.
In order to keep the price of coastal insurance relatively affordable, insurers are allowed in many coastal states to charge higher deductibles during a hurricane compared with some other natural disaster. The difference is hundreds or thousands of dollars because a standard deductible is often $500 or $1,000, compared with a so-called “hurricane deductible” of 1 percent to 5 percent of the home’s value.
A new law passed by the General Assembly last year after Tropical Storm Irene says that insurers can only require their customers to pay higher “hurricane deductibles” if the National Weather Service declares a hurricane and there are recorded sustained hurricane force winds 74 miles per hour, or more, anywhere in the state. Connecticut has gusts stronger than that, but not sustained winds, said Connecticut Insurance Department spokeswoman Donna Tommelleo.
Many people, however, are sorting through the damage caused by storm surge that swamped neighborhoods all along the coast. Those property owners may have juggle two separate insurance-claims processes — one for wind-related damage that is covered by homeowner’s insurance and another for flood damage.
People who have problems with their insurers could call the state agency that regulates insurance companies, the Connecticut Insurance Department, to get assistance from the agency’s consumer affairs unit. Call 800-203-3447, or visit www.ct.gov/cid
“We’ve been getting calls, but not nearly as many as we will,” said Gerard O’Sullivan, manager of the Insurance Department’s consumer affairs unit.
State insurance regulators have approved temporary licenses for 1,300 out-of-state claims adjusters, though it wasn’t immediately clear how many of those are in Connecticut at this point as insurers respond to problems across a wide swath of the Eastern U.S.
Flooding, like the storm surge that sloshed into neighborhoods, isn’t covered by regular homeowner’s insurance. Flood damage is typically only covered if a property owner has a National Flood Insurance Policy as administered through the Federal Emergency Management Agency.
Flood insurance used to be only available through agents who dealt directly with the federal government, but it was supplemented in 1983 to include insurance companies who issue policies and work through the claims process for customers, according to the Insurance Information Institute. Insurers receive an expense allowance from the government for the policies, but the government pays claims and retains premiums, according to the Insurance Information Institute, which is a trade-based research organization in New York City.
Connecticut has received $235 million in payments on 20,900 claims from the flood insurance program as of Aug. 31, 2012, for all the years on record, dating back to Jan. 1, 1978, according to FEMA.
One of the most frequent complaints people in Connecticut had after Irene was that they were surprised to learn that flood coverage doesn’t cover everything that a homeowner’s policy does cover. For example, additional living expenses, decks and patios aren’t covered by flood insurance, but are by some homeowner’s policies, said O’Sullivan, the state Insurance Department’s consumer affairs manager. He encourages people to call the Insurance Department if they have a problem.
“We have contacts with FEMA and the National Flood Insurance Program,” O’Sullivan said.
Additionally, FEMA has approved assistance for individuals and families that suffered damage during Hurricane Sandy. President Obama’s major disaster declaration for Connecticut means individuals can get cash and loan assistance if they are in one of the following counties: Fairfield, Middlesex, New Haven and New London, and the Mashantucket Pequot Indian Reservation.
Assistance includes grants for home repairs to replace essential household items not covered by insurance that will make a home safe, sanitary and functional. Assistance also includes:
- Grants for personal property to help meet medical, dental, funeral and transportation not covered by insurance or other programs.
- Unemployment up to 26 weeks for workers who temporarily lost jobs because of the disaster and who do not quality for state benefits, such as self-employed people.
- Low-interest loans to cover residential losses not fully covered by insurance.
- Loans up to $2 million for small businesses, co-ops and nonprofits that suffered cash flow problems and need capital to recover from the event.
- Loans of up to $500,000 for farmers, ranches and aquaculture operators.
To get disaster assistance, visit www.DisasterAssistance.gov, or call 1-800-621-3362.
FEMA’s most recent figures provided online — as of Sept. 30, 2011 — show the following number of flood-insurance policies for coastal states in the Northeast: 41,094 in Connecticut; 24,820 in Delaware; 9,054 in Maine; 70,200 in Maryland; 55,398 in Massachusetts; 9,225 in New Hampshire; 230,708 in New Jersey; 164,203 in New York; 16,070 in Rhode Island.
New Jersey and New York had more flood claims than any other state for the 12 month period ending Sept. 30, 2011, the end of the fiscal year for the federal government, which included Tropical Storm Irene.
New Jersey had almost a half million flood-insurance claims during that 12-month period, New York had nearly 400,000 and Connecticut had 69,194.