Mar 26 2023 Hurricane Sandy: Will Insurance Companies Cover the Cost? Insurance Will Not Cover Some Losses Caused by Hurricane Sandy Hurricane Sandy swept through the East Coast on October 29, 2012. New York and New Jersey were hit the hardest and suffered the most property damage. All states from Maine to Virginia experienced some degree of destruction. Unfortunately, many homeowners and business owners are learning that their insurance policies do not provide coverage for all of their financial losses. Flood Damages May Not Be Covered by Insurance Hurricane Sandy caused extensive flooding in areas that did not previously experience flood damages. Standard insurance policies for homeowners do not cover property damage caused solely by flooding. Homeowners who did not purchase separate flood insurance policies can suffer uninsured flood damage losses that will cost hundreds of thousands of dollars to repair. Mortgage banks require homeowners with houses near the shore to purchase flood insurance. Most commercial insurance companies do not offer flood insurance. Flood insurance in the United States is generally purchased from the National Flood Insurance Program offered by the federal government. Homeowners who did purchase separate flood insurance policies are often disappointed to learn that their expensive policies do not cover all of their property damage losses caused by flooding. The National Flood Insurance Program only insures up to $250,000 in property damage and up to $100,000 in damage to the contents of the home. Additionally, damage to personal property located in the basement of a house is not covered by flood insurance. Homeowners who have fully furnished basements will not receive insurance funds to replace the cost of the furniture and personal possessions in their basement. Insurance Will Cover Losses to Cars Damaged by Hurricane Sandy Useless cars filled with mud and debris were a common sight along the East Coast after Hurricane Sandy. Fortunately, comprehensive car insurance policies provide coverage for flood damage to cars. Business Interruption Insurance Will Not Cover All Business Interruption Losses Businesses across the East Coast were forced to close due to Hurricane Sandy. However, many insurance companies are refusing to pay business interruption claims caused by the storm. Insurance companies will typically only pay for business interruption losses if the business suffered direct physical damage. However, businesses that did not suffer property damage still suffered business interruption losses. Breakdowns in public transportation systems and flooded roads made it difficult or impossible for businesses to open for days after Hurricane Sandy. Insurance Coverage is Helping the Recovery Effort, but Many Uninsured Losses Remain Payouts from insurance companies are helping rebuild the parts of the East Coast devastated by Hurricane Sandy. However, homeowners and business owners are discovering that not all financial losses caused by the storm will be covered by their insurance companies.