Make no mistake about it, Superstorm Sandy was a monster of a storm. However, Sandy was not a hurricane when it made landfall in the U.S. Why should you care that Sandy was a post-tropical storm and not a hurricane, you ask? The answer is that your insurance policy probably has a different deductible for damage resulting from a hurricane that is higher than your normal deductible.
Market terms for hurricane deductibles for insurance policies is usually 10% of the face amount of the policy. So, if you have a $300,000 policy with a $2,000 deductible, your Superstorm Sandy deductible should be $2,000, but if Sandy was a hurricane, then your deductible would have been $30,000. Thankfully, for you, and to the chagrin of insurance companies, Sandy has been ruled by the New York State Superintendent of Insurance to be a post-tropical storm, not a hurricane. That’s because the classification of a storm as a hurricane is based on the storm’s wind speeds, not the storm’s size or the level of damage inflicted by the storm.
One other item to look out for: the next round of insurance policies issued by insurance companies may have additional terms that carve out “superstorms.” While there is no guarantee that this will be the case, it’s something to look out for when you are reviewing the terms of your policy. Make sure that you ask the right questions when signing up, and if you have any questions, you can always reach out to us at Cohen & Fitch, LLP at (212) 374-9115 or email@example.com.