N.J. Commissioner: 99.4% of Non-Flood Sandy Claims Settled

New Jersey Department of Banking and Insurance Commissioner Ken Kobylowski said that among the 470,281 non-flood, Superstorm Sandy-related homeowners, automobile and commercial claims that were filed in New Jersey, 99.4 percent have now been settled, representing $4.3 billion in payments to date.

Kobylowski spoke about New Jersey’s Sandy claims at an event titled “Meet the Decision Makers,” organized by the New Jersey Business & Industry Association, a statewide employer association. The event was held last Friday, Oct. 3, in Monroe Township, New Jersey.

“As you know it has been almost two years since the storm struck New Jersey. I think most of you would agree it was the worst natural disaster to strike the state in a generation,” Kobylowski said.

“As you all well know, Sandy was mainly a flood event with flood claims under the jurisdiction of the National Flood Insurance Program,” said Kobylowski. But he added that even though it was mainly a flood event, there were nearly half a million non-flood, Sandy-related homeowners, automobile and commercial claims filed in New Jersey.

$4.3B Paid Out So Far

About 470,281 homeowners, automobile and commercial claims were filed in New Jersey in connection with the storm, said Kobylowski. And so far, carriers have settled 467,360, or 99.4 percent of them, paying out nearly $4.3 billion to date. The overwhelming majority of those were homeowner’s insurance claims, he said.

Commenting further on commercial insurance claims, Kobylowski said that as of June 30, there were 41,568 Sandy-related commercial property claims filed and 98.3 percent of them have been closed. The total paid loss for those claims was $1.12 billion.

And there were 5,443 commercial auto claims filed, with 99.1 percent of them closed. The total paid loss for those claims was $106 million.

In addition, there were 14,664 business interruption claims filed, with 99.1 percent of them now closed. The total paid for those claims was $220 million, Kobylowski said.

“Business interruption insurance can really be key, particularly to a small employer, in the event of a natural disaster like Sandy,” said Kobylowski. “It was a real lifesaver to some employers who lost power and could not operate for an extended period of time.”

“It points to the issue that it is important as an employer to speak to your insurance broker and make sure you have the right kind and the right level of insurance,” he said.

Kobylowski also spoke about the effort by the Department of Banking and Insurance to assist New Jersey residents in wake of Sandy:

• He said the department handled more than 4,200 consumer inquiries related to the storm and recovered an additional $6 million for consumers.

• In conjunction with other state and federal agencies, the department participated in more than 50 Mobile Offices, where department representatives, NFIP staff and sometimes other state departments went into communities, answered consumer questions, and assisted residents in filing storm-related insurance claims.

• Kobylowski said his department intervened on behalf of hundreds of consumers when mortgage servicers have unfairly delayed disbursements. As a result, four major mortgage servicers released 50 to 75 percent of remaining insurance proceeds so that homeowners along the shore could begin to rebuild.

• In May 2013 the department implemented a mediation program in which consumers with unresolved claims were given the option to have their claims reviewed free by an independent outside mediator. Since then, 704 mediations have been held. Of those, 469 were settled (281 fully settled, 97 partially settled, and 91 settled prior to the mediation) and 235 are at an impasse. Kobylowski said the settlement or partial settlement rate now stands at 66.5 percent. Statewide, the department recovered over $4.43 million for consumers through the mediation process.

• In April in response to Gov. Chris Christie administration’s request, the Federal Emergency Management Agency granted New Jersey residents and businesses an additional six months to file a complete flood insurance claim, or proof of loss, in connection with damages from the storm. FEMA announced that the deadline for filing proof of loss documentation has been extended from April 28, 2014 to October 28, 2014. This was the third extension granted by FEMA.

• Kobylowski said FEMA has not yet ruled on the department’s request seeking clarification on the interplay between the extended proof of loss deadline and the one-year statute of limitations for filing litigation relating to flood insurance claims.

Kobylowski said all of the department’s requests to FEMA asked the agency to interpret the one-year time period as beginning only after the denial or partial disallowance of a claim following the policyholder’s submission of the last timely filed proof of loss. He said the clarification would mean that the one-year window for residents to file Sandy-related lawsuits would not begin until after a claim was perfected, possibly by the submission of multiple proofs of loss, and thereafter denied.