Superstorm Sandy may be long gone, but her impact is still being felt by the millions of property owners she unexpectedly visited this week. Sandy not only brought wind and water damage, but she also disrupted the economy, creating waves of financial havoc across the entire country.
The region Sandy hit is home to 60 million people and accounts for a whopping quarter of the US economy, according to RBC Global Asset Management. While it is too early to calculate Sandy’s exact cost, initial property damage estimates are around $20 billion, according to consulting firm IHS Global Insight.
For many on the East Coast, this was their first run-in with a damaging hurricane. Many are out of power, have flooded basements or downed trees on their property.
If you suffered damage to your home, vehicle, or other personal property, it’s not too late to take steps to limit your losses and maximize your Federal aid and insurance claims:
Before you start, avoid causing further damage to your property – and to yourself. Here are some handy safety tips:
LIVE WIRES: Alert your local electric utility if any wires have fallen onto your property. Never touch any utility wires and remember that standing water can hide deadly live wires.
WHAT’S THAT SMELL? Natural gas lines can be damaged by flooding. If you smell gas, leave first – THEN call 911.
ELECTRICITY SAFETY: Turn electrical power off at your main circuit breaker until a qualified electrician determines if it’s safe to turn it back on. If electricity is restored before soaked circuits are repaired, it could cause a fire.
AVOID FLOODWATER: Floodwaters often contain toxic chemicals and raw sewage. If you have been exposed to floodwater, talk to your doctor ASAP about vaccinations for water-borne infections. Wash your hands often when working outdoors.
ROOF DAMAGE: If your roof has suffered severe wind and water damage, you need to keep more water from coming into your home. Hire a licensed contractor to temporarily cover leaking areas to prevent even more damage.
INTERIOR WATER DAMAGE: Turn fans on and keep windows open to minimize mold and mildew from spreading inside your home. Quickly move soaked furniture and carpets outside.
For many of you affected by the storm, the biggest damage sustained isn’t the biggies, like flood and fire, but more benign, yet annoying, issues like power loss and property damage from downed trees. Power loss should not be overlooked – it is disruptive and you can receive benefits.
An estimated 8.3 million people have lost power due to the storm and will have sustained losses from everything ranging from spoiled food to lost business income.
There is assistance for those suffering damages through power loss available through both government (FEMA) and private insurance (home owners and renters insurance). But for big damages, chances are you’re covered if you have homeowner’s insurance (except when it comes to flooding).
Government relief programs, namely FEMA, will not compensate you for spoiled food for any reason – they ask you to get food stamps or find food from relief organizations – but most private homeowner’s and rental insurance policies do.
Food can be expensive, so go ahead and claim the loss if your policy allows you to do so.
The government may not be able to compensate you for your lost food, but they can help when it comes to lost wages and lost business income.
For those whose jobs have been lost due to the storm for whatever reason, FEMA can help by providing unemployment benefits. This benefit can last up to 26 weeks but can be extended.
FEMA will also cover self-employed people who have been unable to work due to the storm. This could potentially help people who have had equipment destroyed by power surges or for those who have lost power to their home offices.
If you have comprehensive and collision coverage through your auto insurance provider, you are covered from any kind of accident related to the storm – that includes a tree falling on a vehicle, as well as wind and water damage.
If you have basic liability coverage, then your auto insurance won’t cover any damage to your vehicle. But you’re not totally out of luck.
If your neighbor’s tree fell on your vehicle, then your neighbor is technically liable to pay for the damage – not your auto insurance. Your neighbor can use their homeowner’s insurance to cover your crushed car.
There is an array of damage that can occur to your property during a big storm – most of which is covered by your homeowner’s policy. That includes a tree falling on your house, your roof blowing away, and fire.
Homeowner’s insurance also covers all of the contents inside your home and inside surrounding structures (i.e. your car in your garage).
But it is important to note that your homeowner’s insurance does NOT cover damage cause by flooding, which is covered only by a stand-alone insurance policy. Flood insurance is available through the National Flood Insurance Program, where policies run the gambit on price depending on where you live.
If you rent your home or apartment, you don’t have to worry about damage to the exterior of the building – that’s your landlord’s burden. You only have to worry about the stuff you actually own, like your furniture and electronics.
Renter’s insurance covers most damage associated with a storm. But when it comes to flooding, it can get a bit tricky because some policies cover damage from flooding and some do not. Check your policy to see if you are covered.
The “Hurricane” clause
There is currently a lot of controversy over whether or not homeowners will be subject to a special deductible in their homeowner’s insurance related to damage caused by a hurricane.
The hurricane clause in many homeowner’s insurance contracts say that any claim made due to damage from a hurricane is subject to a different deductible than normal.
A normal homeowner’s insurance deductible (the money you have to pay before the insurance kicks in) is usually $500 to $1000. But the deductible under the hurricane clause is much higher at 1% to 5% of the value of your home.
Governor Cuomo of New York says residents of his state will not have to pay the hurricane deductible. That’s because there is some debate as to what kind of storm Sandy was when it rolled into Southern New Jersey Monday night.
A hurricane is defined as a tropical disturbance with sustained winds above 74 miles-an-hour. The National Hurricane Center says that Sandy had sustained winds of 80 miles-an-hour when it hit landfall at 8pm on Monday, but the storm was categorized as “post-tropical” – a technical term based on the location and rotation of the storm.
It is unclear how the insurance agencies will categorize Sandy, so be prepared to pay a higher deductible.
Filing insurance claims
Time is of the essence when filing insurance claims and filing for Federal disaster aid. Documenting all storm damage – from basement to ceiling – will help the procedure go more smoothly and may even help you get paid faster. Here’s how to start:
BE ORGANIZED: Create separate files for each insurance agency or Federal agency you are filing a claim.
BE DETAILED: Walk through your property and catalog all damage, noting details of damage to items (description and location of item and severity of damage). Take photos, if possible.
DON’T DELAY: After assessing all damage in detail, contact your insurance agent to get the claims process started. Remember, the longer you wait, the lower your payout could be.
If you live in one of the states affected most by Hurricane Sandy, you may be eligible for Federal disaster recovery aid. Visit http://www.disasterassistance.gov/ to determine whether you are eligible to file a claim, or call FEMA’s helpline at 800-621-3362. Here’s some info on what might be available to you:
- If the storm has made your home unfit to live in, you might be eligible for Federal aid that could cover temporary mortgage or rental payments.
- For repairs not covered by private insurance, low-interest loans may be available (up to $200,000 for primary residence; $40,000 for personal property, including renter losses).
- If you’ve lost your job temporarily due to the storm, you may be eligible for up to 26 weeks of unemployment payments.
You can find more information on Flood insurance at www.FloodSmart.gov .
Cyrus Sanati is a frelance financial journalist whose work has appeared in dozens of leading publications, including The New York Times, BreakingViews.com, and WSJ.com. Follow Cyrus on Twitter @csanati.