Senator Schumer troubled over actions of insurance companies
Hurricane Sandy has caused a lot of trouble for insurance companies, consumers, and state governments in the Eastern U.S. New York, in particular, has seen a great deal of these troubles manifest in the wake of the powerful storm. With storm surges causing widespread flooding and damages being done to homes and other properties, the state is reeling from the impact of Hurricane Sandy. Senator Charles Schumer believes that the troubles are just beginning for the state, however, especially as insurers look to have the natural disaster reclassified by the National Oceanic and Atmospheric Administration (NOAA). Senator Schumer is now keen to ensure that insurers do not impose higher costs on victims of Sandy.
Sandy reclassification causes tension within the insurance industry
Though often referred to as a hurricane, Sandy has been classified and reclassified as a tropical storm numerous times by NOAA. The agency has yet to settle on a classification for the disaster, with the most recent of which tagging Sandy as a tropical storm. This classification comes with implications for the insurance industry, which will be held to a certain set of regulations that are meant for tropical storms and not hurricanes. Senator Schumer believes that insurers are beginning to lobby for Sandy to be classified as a hurricane, suggesting that their intentions for doing so a dubious at best.
Senator Schumer sees signs of higher costs for homeowners
Senator Schumer suggests that insurance companies want to reclassify the storm as a hurricane in order to impose massive charges on homeowners that have fallen victim to the storm. Though New York Governor Andrew Cuomo signed an Executive Order that prevents insurance companies from imposing hurricane deductibles on victims, insurance companies have other ways to introduce these deductibles that sidestep the measure. Federal officials have labeled Sandy as a “post-tropical cyclone,” which has further frustrated the insurance industry, but not restricted their ability to impose higher deductibles on policies.
Federal officials to hold insurance industry accountable for legitimate claims
Senator Schumer is warning insurance companies that they will be held accountable for all claims produced by the storm, as long as they are legitimate claims. The drama surrounding the powerful storm continues to unfold as the recovery effort moves forward at a slow pace. Senator Schumer is keen to ensure that insurance companies do not beleaguer the recovery process for the sake of their own financial recovery by imposing high costs on homeowners.