Hurricane Sandy spawns class-action lawsuit against insurers

New Jersey homeowners insurance law

Hurricane Sandy New Jersey Insurance LawsuitNew Jersey victims file suit against insurers in wake of Hurricane Sandy

Hurricane Sandy continues to cause problems along the East Coast. Though the storm is long over, its effects can still be felt in numerous states. Insurers may soon feel another financial impact as a result of the storm, but it will be coming from consumers instead of the storm itself. Hurricane Sandy victims from New Jersey have filed a class-action lawsuit against nine insurance companies. The suit claims that these insurers denied claims through the misinterpretation of something so simple as a basement.

Insurers accused of denying claims for misinterpretation of basements

The suit names Fidelity, State Farm, Travelers, and several other insurance providers as defendants, with “everyone in New Jersey insured by these companies” as plaintiffs. Many of the people in New Jersey affected by Hurricane Sandy did not receive compensation from their insurance companies because their homes were classified as basements rather than actual dwelling places. This affects a huge number of people that lived in ground-level homes.

Insurers may fight suit on technical grounds

Plaintiffs are seeking compensation for the damage that Hurricane Sandy caused to their homes, plus pre-judgment interest. The insurers names in the lawsuit have not yet commented on the matter, but speculation suggests that insurers will fight the suit on technical grounds. Some insurers consider properties that are not elevated from ground-level to be basements rather than appropriate housing. This is likely because such homes are at high risk of falling victim to flood damage. Insurers are often looking for ways to mitigate their exposure to risk and tend to take very technical approaches when doing so.

Hurricane Sandy continues to have a nightmarish effect on East Coast

Hurricane Sandy is likely to continue causing problems for the East Coast for several months to come. Claims are still coming in to some insurance companies and payouts have also been put on hold in some states. Officials in affected states have been working to ensure that consumers are services appropriately, but it has been a difficult trial for all parties involved. All these problems have proven to prolong the recovery process in the wake of Hurricane Sandy.

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