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RallyCry (< 20)

Hurricane Sandy: Homeowners Get Screwed

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October 31, 2012 – Comments (4)

Mark my words. This is about to be huge news and everyone related to the National Weather Service and the insurance industry is going to want to bury it. Since the National Hurricane Center did not issue Hurricane warnings for Sandy, residents on the coast line from Virginia to New England are left out to dry.

http://www.baltimoresun.com/business/consuming-interests-blog/bal-consuming-interests-sandy-and-hurricane-deductibles-in-maryland-20121031,0,1419037.story

 

Essentially, the National Hurricane Center left that issuance of the hurricane warnings to local offices who applied their own judgement and criteria as to whether Sandy was a Hurricane or Post-Tropical Storm at the time of landfall. The storm made landfall in NJ at 8pm with winds of 80 mph which on wind speed alone qualifies as a Category 1 Hurricane.

From the National Hurricane Center website:

Hurricane Warning: An announcement that hurricane conditions are expected within the specified area.

Because outside preparedness activities become difficult once winds reach tropical storm force, warnings are issued 36 hours in advance of the anticipated onset of tropical-storm-force winds.

Action: During a warning, complete storm preparations and immediately leave the threatened area if directed by local officials.

http://www.nhc.noaa.gov/prepare/wwa.php

Now because Sandy was expected to lose tropical characteristics before landfall, the NHC released a press statement explaining their decision on 10/27/2012.

http://www.nhc.noaa.gov/news/20121027_pa_sandyTransition.pdf

This all smells bad to me. There was so much on the line for insurance companies with millions of customers in major northeast metro areas impacted by this storm. I think this story will grow in coverage in the coming days as homeowners go to make claims and are turned away.

4 Comments – Post Your Own

#1) On October 31, 2012 at 11:26 PM, awallejr (76.71) wrote:

You lost me on the screwed part. Your first link says if Sandy was NOT called a hurricane people would NOT get hit with the "Hurricane deductible."  Wouldn't that be good for the homeowner?

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#2) On November 01, 2012 at 4:53 PM, RallyCry (< 20) wrote:

Good point  awallejr, I misinterpreted the article. However, a large majority of the damage was due to flooding so if they didn't have flood insurance they are still screwed.

http://www.sunherald.com/2012/11/01/4278539/flood-program-has-only-4-billion.html

Only 38,785 residential and business policies were in force in New York City as of Aug. 31; while only 8,129 Atlantic City, N.J. households or businesses had flood coverage as of that date, NFIP statistics show.

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#3) On November 02, 2012 at 2:34 PM, Melaschasm (53.59) wrote:

I believe NY and NJ were declared disaster areas, and qualify for a variety of Federal aid programs.  I am not certain those programs will provide 100% funding for the damage caused, but homeowners are not completely without aid.

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#4) On November 02, 2012 at 3:00 PM, awallejr (76.71) wrote:

Except many people will have to make a decision whether to abandon and move elsewhere or stay and rebuild.  If the houses were already mortgaged to the hilt  and the homeowner will ultimately then have to take on even more debt or use cash from savings to rebuild they are really just making a gift to the bank at that point.

Flood insurance is expensive and most people don't take it unless they are in a designated flood zone.

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