New Jersey homeowners continue to fight for recovery two years after Hurricane Sandy
Nearly two years after Hurricane Sandy struck the eastern U.S., the storm is still causing problems for homeowners. The hurricane first formed on October 22 and made landfall in the U.S. shortly thereafter. The storm caused an estimated $68 billion in damage, and many homeowners are still recovering from the disaster and ongoing struggles with flood insurance are compounding the issue. A joint insurance fund, which is paid for by 400 small towns throughout New Jersey, has run out of money due to claims associated with Hurricane Sandy.
Insurance fund runs out of money
The fund was comprised of 19 smaller funds that provided coverage for small towns. The fund helped cover the cost of flood insurance for homeowners in these towns, offering them a financial safety net for damages they could see from natural disasters. The fund was capped at $50 million before Hurricane Sandy formed. According to the New Jersey Municipal Excess Liability Joint Insurance Fund, the hurricane caused a total of $65 million in flood damage, exceeding the fund’s ability to cover claims.
Legal action may be an option for homeowners
Homeowners could be taking legal action against the fund because of its lack of capital. Chip Merlin, an attorney that specializes in legal matters concerning insurance coverage, suggests that the fund was “woefully” underprepared for the disaster. Many of the towns covered by the fund are located near the Atlantic Ocean and are exposed to significant flooding risks, especially during hurricane season. In the wake of 2011’s Hurricane Irene, the insurance fund may not have done enough to ensure its solvency against future, devastating disasters.
Flood insurance continues to be a problematic issue
Zurich Insurance provides the policies offered through the joint insurance fund. The fund suggests that there may have been some confusion regarding what was and was not covered by the policies it offered. David Grubb, executive director of the joint insurance fund, argues that some of the claims related to Hurricane Sandy should have been handled by the federal government, but were not.
