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Now for some good news: Because the National Weather Service never issued an official hurricane declaration for the storm that hit Connecticut this week, homeowners with insurance claims will save money compared with last year's Hurricane Irene, which was downgraded to a tropical storm as it neared the region.
"This time, it was not a hurricane, so there will be no hurricane deductibles," Gerard O'Sullivan, manager of consumer affairs for the state Department of Insurance, said in a phone interview Wednesday.
O'Sullivan said a state law enacted earlier this year after confusion over coverage of damage from Irene gave insurance companies more precise guidance about what constitutes a hurricane. Now, there must be sustained winds of 74 mph for a hurricane to be declared. The highest sustained winds recorded during Sandy were 59 mph in Bridgeport. The biggest gust, recorded in Madison, was 86 mph.
This means that insurance companies will have to make a complete payout on a policy after the standard deductible, which for most homes ranges between $500 and $1,000.
If Sandy had been declared a hurricane in Connecticut, a deductible of 2 percent of a home's valuation would be in effect for many policies, meaning the owner of a $300,000 home would be faced with paying for the first $6,000 of damages.
Some homes in particularly vulnerable waterfront locations, O'Sullivan said, would have been faced with even higher deductibles of 5 percent in the case of a hurricane declaration, forcing them to pay $15,000 on a similarly valued house.
Charles Lee, chairman emeritus of the insurance-loss section of the Connecticut Bar Association, said the state Insurance Department has done a good job in advocating for consumers, and Commissioner Thomas B. Leonardi was instrumental in suggesting legislation that would put to rest concerns about homeowners facing battles over hurricane deductibles.
"They're an extremely responsive agency," Lee said.
Estimates of the nationwide costs associated with Hurricane Sandy cleanup range from $30 billion to $50 billion, but Connecticut has not compiled a preliminary estimate. Lee, however, said statewide insurance payouts could be higher than the $240 million for the rain-intense Tropical Storm Irene because the wind damage from this storm is more likely to be covered in standard homeowners policies than water damage, which requires separate flood insurance.
Lee pointed out that anyone without insurance or whose policy does not cover all the losses may be eligible for relief of up to $31,400 from the Federal Emergency Management Agency. The first step for these homeowners would be to register with FEMA by phone or online so that a federal adjuster can be sent out to investigate, he added.
"There's one huge catch, though: You have to exhaust your insurance first," he said.
Lee said homeowners with complaints about coverage should first turn to the state insurance department. The second line of defense, he said, would be to call the state bar association's Disaster Insurance Hotline, which has lawyers to offer advice in resolving insurance disputes.
Lee estimated that 80 percent of homeowners accept the amounts offered by insurance adjusters. Others can turn to dispute resolution or, in the worst-case scenario, will decide to sue insurers in state or even federal courts.
"The law in Connecticut is very balanced, and in some cases can be very pro-policyholder," Lee said.
O'Sullivan, the insurance department spokesman, said a lot of people are still picking up the pieces after Sandy, and his office has not fielded a flood of questions about coverage. But he anticipates many questions about whether water damage is covered (usually, if the problem starts with a roof being blown off), what to do if a neighbor's tree causes problems (covered by the homeowners policy of the affected property) and what happens if a car is damaged by falling limbs (paid through an automobile's comprehensive coverage).
Water damage is covered by a basic policy only if the problem starts with a roof being blown off, followed by water seepage, according to Lee. Other flooding and water seepage usually requires separate flood insurance, according to experts.
O'Sullivan said other coverage often varies company to company, so homeowners should review their policies. With 1,300 out-of-state adjusters eligible to help out policyholders, he expected insurance companies to act quickly in processing claims.
"Don't give up," advised Lee. "Keep pressing them. Document everything."
Connecticut Insurance Department:
Federal Emergency Management Agency:
Connecticut Bar Association Disaster Insurance Hotline:
Insurance coverage notes
• Damage caused by flooding is not covered under a standard homeowners policy. A separate flood insurance policy is required.
• Sewer and drain back-up may not be covered under a standard homeowners policy. Consumers can purchase water and sewer back-up endorsements to provide additional coverage for back-up into homes from sewer lines.
• Food spoilage caused by a power outage is not covered under all homeowners insurance policies.
• Water damage leaking into homes from roofs damaged during rain may be covered. Review policies and speak to insurance agents before filing claims.
• Policies may limit the amount of coverage provided per tree. Properties closer to the shore may contain higher wind deductibles.
Insurance claim tips
• Contact your insurer as soon as possible
• Take photos of the damage
• DO NOT make permanent repairs until your insurer has inspected the property
• Keep a diary of all contact, conversations with your insurer
• If you can still live in the home, talk with your agent about critical repairs that need to be made and save receipts for your claim.
• If you need to find other lodging, keep records of expenses and all receipts.
• Do not feel rushed or pushed to agree on a settlement. If there are disagreements, resolve them first with your insurer and then, if you cannot reach an agreement, contact the Connecticut Insurance Department.
• Your full claim may come in multiple payments. The first will likely be an emergency advance and may include additional living expenses.
• Even after settling your claim, your insurance company may make additional payments if you think of items that were not in your initial loss list.
• If your damages exceed the amount of coverage, federal agencies will occasionally provide grants or low-interest loans to assist following major disasters.
Source: Connecticut Insurance Department