Storm-Surge Damage May Not Be Covered by Some Insurance

Regular homeowners’ and renters’ policies don’t cover flood losses. For residences, people must buy extra flood-insurance coverage, reports Business Week... there was a big debate during and after Hurricane Katrina over whether [storm surge] damage was caused by flooding or wind, with wind damage covered by standard policies. Bob Hartwig, president of the Insurance Information Institute, a trade group, says “that issue has been settled. There is no question that a storm surge is a form of flooding.”

That means that homeowners affected by Sandy’s surges and who lack flood insurance are out of luck. Hartwig says that in low lying areas—such as parts of Brooklyn and Queens—“the penetration rates for flood coverage are very high.” But not everyone has this coverage