In 2012, Super Storm Sandy battered New Jersey. When the dust (or water) settled, many New Jersey property owners were left with significant damage to their properties. Unfortunately, over a year after the storm hit, many are still fighting with their insurance companies for compensation. It’s expected that lawsuits against insurance companies will come in two waves. The first was cases filed in the 6 to 8 months right after the storm. There will likely be another wave of lawsuits as un-asserted claims near their statutes of limitations which is the deadline for filing claims.
Lawsuits against insurance companies can take different forms. One of the main areas of dispute is what protections policyholders actually have and what exactly caused that damage. For example, many standard homeowners and commercial policies do not cover floods, but do cover wind-driven rain. The more complex the storm, the harder it can be to prove what aspect of that storm caused the particular damage to the property. Was it strong winds that caused the damage or was it flooding?
Also, lawsuits can come from different interpretations of the language in the policy. There are even lawsuits challenging the fairness of the language written in policies limiting a policyholder’s coverage. For instance, many insurance policies feature what is called “anti-concurrent causation clauses.” That means if a policy covers damage caused by hurricane-force winds, a policyholder will not be protected if the damage occurs at the same time as another peril that is not covered. In these cases, even if a policyholder is insured for wind damage, coverage can be denied by the insurance company if the damage occurred at the same time as a second, non-covered peril, such as flooding. A way for a policyholder to succeed against the insurance company would be to argue, if possible, that the language of the policy was unclear or vague. If a court finds that to be true, it could void the exclusion and allow coverage.
Going forward, with our weather now so unpredictable and severe, it’s essential to thoroughly review the terms of your insurance policy. If you’re thinking about filing a “Sandy suit,” talk to an attorney to see if you have a legitimate claim. With the assistance of Charles J. Vaccaro, J.D. Candidate May 2015.