Hurricane Sandy Will Spawn Insurance Suits
Victims of Hurricane Sandy will likely file hundreds, if not thousands, of lawsuits against insurers for unfairly denying their claims or paying out insufficient sums. Already, some suits are in the courts, notes an article in The Star Ledger, a New Jersey newspaper.
“It’s traumatic to lose your house and everything you own,” notes one homeowner who is pursuing a Hurricane Sandy claim. “On top of this, you find out your insurance is not helping you at all, that you’re totally on your own after years of paying them.”
Among policyholders turning to litigation are Susan and Ahmad Sharif, who owned a cottage in the New Jersey coastal town of Brick. They had taken a policy that covered their beachfront house and contents for $125,000. However, after Sandy knocked the house off its foundation and caused the garage to collapse, Paramount Insurance Co. only gave them $6,343.68.
That sum was for the siding ripped off by the storm’s winds, the insurer explained. Flood coverage wasn’t part of their insurance package — although the Sharifs believed they had both flood and wind damage coverage. “I 100 percent thought that I had flood insurance,” Susan Sharif told The Star Ledger. “My house is 20 feet from the water. Why would I not have flood insurance?”
In response, in December, the couple sued Paramount and their insurance broker, the Brick-based Tri-County Agency. The Sharifs argue that when they bought their cottage, they instructed the broker they wanted total coverage. No one told them the policy didn’t extend to floods, nor did anyone advise them to purchase flood insurance. They also claim Tri-County demonstrated negligence by not making sure they obtained complete coverage.
In their suit, the Sharifs allege Paramount didn’t sent send them yearly notices that their homeowners policy wouldn’t cover flood losses. (New Jersey state law requires these annual notifications.) Paramount has acknowledged it has no documentation that it issued any of the required flood insurance notices, the Sharifs say.
“It’s a huge loss in our state, our age to have our security taken away because some company didn’t do their job,” says Susan Sharif.
A Paramount vice president wouldn’t comment on the suit, states the article. A representative of Try-County Agency also declined to comment.