Homeowners Hit by Sandy May Save Thousands of Dollars

How is a hurricane deductible different from your basic homeowner policy deductible? It is based on a percentage of your property's insured value, and it can be up to 5 percent. So let's say your home is insured for $300,000. That's a $15,000 deductible, which is likely far higher than your regular deductible. The average homeowner deductible is between $500 and $1000.

"We have informed the insurance industry that hurricane deductibles are not triggered because Sandy did not have sustained hurricane-force winds when it made land in New York," noted NY's Superintendent of Financial Services Benjamin Lawsky in the release. "We will be working with insurers to help them respond as quickly as possible to homeowners who need to file claims. And we will be sending our mobile command center to hard hit areas to help consumers with insurance questions and problems."

(Read More: Trains Roll, but Northeast Struggles Back From Sandy.)

There is very specific language in homeowner insurance policies in terms of hurricane deductibles. Usually the storm has to reach specific wind speeds to trigger the deductible. A state governor couldn't necessarily override that private contract.

"The way the insurers look at it is that this is a private contract between the insurer and the policy holder, and the policy as written is going to be enforced," noted Michael Barry of the Insurance Information Institute. "In this case Sandy does not appear to have reached the threshold to activate the hurricane deductible."

The insurance companies probably didn't need Governor Cuomo's directive as such, since they were already doing their own assessments immediately following the storm. (Read More: Sandy's Economic Cost: Up to $50 Billion and Counting.)

"We have done a review of the best available National Weather Service data and compared that to our language, and we have determined that the hurricane deductible will not apply in those states," said State Farm spokesman Phil Supple.

As for how much the difference in the deductibles will cost the nation's insurance companies, that is impossible to calculate at this point, as the companies are still waiting to get in to the hardest hit areas and tally the damage. It is also, as Supple added, "moot" to do any figuring, as they higher deductible clearly doesn't apply.

—By CNBC's Diana Olick; Follow Her on Twitter @Diana_Olick and Facebook.Questions? Comments? RealtyCheck@cnbc.com

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—The Home Depot
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—E. I. du Pont de Nemours and Company
—Apogee Enterprises

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Homeowners Hit by Sandy May Save Thousands of Dollars

The fact that Hurricane Sandy was downgraded to a “Post-Tropical Cyclone” before it made landfall on the East Coast will save homeowners potentially thousands of dollars in home insurance deductibles. 

Homes in Seaside Heights, N.J.New Jersey’s Department of Banking and Insurance Acting Commissioner Ken Kobylowski communicated that to the insurance industry Tuesday night and New York’s Governor Andrew Cuomo announced the same Thursday morning.

“Homeowners should not have to pay hurricane deductibles for damage caused by the storm and insurers should understand the Department of Financial Services will be monitoring how claims are handled,” Governor Cuomo said in a release. (Read More: For Builders, the Storm is Good for Business.)

How is a hurricane deductible different from your basic homeowner policy deductible? It is based on a percentage of your property’s insured value, and it can be up to 5 percent. So let’s say your home is insured for $300,000. That’s a $15,000 deductible, which is likely far higher than your regular deductible. The average homeowner deductible is between $500 and $1000.

“We have informed the insurance industry that hurricane deductibles are not triggered because Sandy did not have sustained hurricane-force winds when it made land in New York,” noted NY’s Superintendent of Financial Services Benjamin Lawsky in the release. “We will be working with insurers to help them respond as quickly as possible to homeowners who need to file claims. And we will be sending our mobile command center to hard hit areas to help consumers with insurance questions and problems.”

(Read More: Trains Roll, but Northeast Struggles Back From Sandy.)

There is very specific language in homeowner insurance policies in terms of hurricane deductibles. Usually the storm has to reach specific wind speeds to trigger the deductible. A state governor couldn’t necessarily override that private contract.

“The way the insurers look at it is that this is a private contract between the insurer and the policy holder, and the policy as written is going to be enforced,” noted Michael Barry of the Insurance Information Institute. “In this case Sandy does not appear to have reached the threshold to activate the hurricane deductible.”

The insurance companies probably didn’t need Governor Cuomo’s directive as such, since they were already doing their own assessments immediately following the storm. (Read More: Sandy's Economic Cost: Up to $50 Billion and Counting.)

“We have done a review of the best available National Weather Service data and compared that to our language, and we have determined that the hurricane deductible will not apply in those states,” said State Farm spokesman Phil Supple.

As for how much the difference in the deductibles will cost the nation’s insurance companies, that is impossible to calculate at this point, as the companies are still waiting to get in to the hardest hit areas and tally the damage. It is also, as Supple added, “moot” to do any figuring, as they higher deductible clearly doesn’t apply.

—By CNBC's Diana Olick; Follow Her on Twitter @Diana_Olick and Facebook.
Questions? Comments?document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');  

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The Future: Let's Talk About Density, Baby/Let's Talk About You and Me (and Thousands of Other People)

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, August 17, 2011, by Sally Kuchar

That's the unofficial theme song for Monday’s SPUR Lunchtime Forum, where architects from three firms in Portland, Seattle and San Diego presented their respective visions of how density and beautiful, functional architecture can co-exist (anticipated complaints from NIMBYS notwithstanding). While previous SPUR forums on the topic have discussed the issues of higher density from a top-down, planning-oriented perspective, here the architects provided examples of individual buildings they have built that fulfill the goal of cramming 100,000 people per square mile, a goal the architects said we will need to achieve in the Bay Area if the population continues to grow at the current rate. Just for reference, on a city-wide basis, San Francisco's density is currently around 17,100 people per square mile.

Despite being from far-flung corners of the West Coast, any of the projects would have fit well in the San Francisco urban fabric both stylistically and because they contain many elements that residents here want: ample outdoor space, affordable housing units, and a lively, pedestrian-scale streetscape at ground level. The only thing that would prevent these projects from being built in San Francisco was the lack of bay windows. While SPUR hasn’t published the presentations from Monday’s forum yet, for more information on the density issue, please see David Baker, Craig Hartman, and Dan Solomon’s presentations from from the first forum on the subject. - Michael Pearce
· Picturing West Coast density [SPUR]
· What would 100,000 people per square mile look like? [SPUR]
[photo via anna vignet]

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