Those with homeowners policies just missed having the dreaded “hurricane clause” go into effect. Thanks to the storm being downgraded right before landfall in New Jersey, property owners with damage only have to deal with one deductible, not two.
According to Marshall McKnight of the New Jersey Department of Banking and Insurance, it was a blessing.
“This clause was added in the 1980s and 1990’s after insurance companies did not want to provide homeowner’s polices to people living in shore communities or adjacent to water,” he explained, adding it puts the burden of a much larger deductible on homeowners. But, this particular clause is triggered only if a storm meets two particular criteria.
First, there must be sustained winds of 74 miles per hour or greater for a certain number of hours, and secondly the National Weather Bureau has to name the storm.
“The first trigger did not happen with Sandy,” McKnight said, explaining that one hour before the storm made landfall in New Jersey, the National Weather Service downgraded the storm to a post tropical cyclone.
“The governor then issued executive order 107 on Nov. 2 which gave the state department of banking and insurance the power to “make, alter, amend and rescind” rules and regulations imposing any condition upon the way insurance companies conduct business in order to safeguard the interest of policy holders in the state.
This, he said, saved residents who had property damage from paying an excessive deductible associated with the hurricane clause in homeowners policies.
McKnight said part of his department’s duty is to educate and protect residents, which they do throughout the year, hopefully before a catastrophic incident occurs.
The spokesperson recommends that residents research information prior to becoming involved in the claims process.
The Department of Banking and Insurance said residents should read their flood and homeowners policies carefully and do the following:
• Assess the damage and make temporary repairs to secure your home;
• Take photos of the damage and remove personal property, and make a list of the damaged property. But do not dispose of the property until an insurance adjuster has reviewed it for the claim. If the property must be removed, take pictures of it and write down serial and model numbers of appliances.
• When it comes to handling a claim, do not feel rushed or pushed into agreeing with a settlement. If a disagreement cannot be reached, the state Department of Banking and Insurance can help. Residents can call 609-292-5064 for more information.
McKnight said that in the wake of a disaster the caliber of Superstorm Sandy, insurance companies are also experiencing difficulties, including handling the volume of calls they are receiving.