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Temporary Housing Help is No Sure Thing for NYC Residents Without Flood Insurance

Posted on November 9, 2012

Hurricane Sandy’s storm surge falls under flood insurance policies, which many NYC residents lack. Here is some advice.

Hurricane Sandy Flood Insurance

Hurricane Sandy's flooding has left many New Yorkers in a bind. (Photo courtesy of Air Force Master Sgt. Mark C. Olsen, via Wikimedia Commons)

Hurricane Sandy refugees are finding out their temporary hotel stays — while their apartment buildings remain uninhabitable — might not be covered by their renter’s insurance policies.

Finding out all of your expenses won’t be covered while awaiting the fate of your apartment is a tough truth to swallow on top of everything else, and we’ve had to share a lot of bad news of the last few days. Flooding, even flooding that was a direct result of a massive superstorm like Sandy, isn’t typically covered by most insurance policies. That includes the evacuation costs incurred by homeowners fleeing the major impact zone of the storm.

We covered the basics of flood insurance last year in the wake of Tropical Storm Irene. Sadly, it’s starting to look like once-in-a-lifetime storms may become the rule rather than the exception for New Yorkers.

Flood insurance may be an excellent idea moving forward, but a new flood policy is of little help at the moment. So what should you do? I recently weighed in on Brick Underground’s article, “What now? A post-Sandy guide to your rights as a refugee renter or owner” to offer recovery tips for New Yorkers, particularly in dealing with the costs of temporary housing:

Legally speaking, if you are unable to occupy your apartment due to evacuation or constructive eviction, you may also be entitled to collect the cost of alternative housing to the extent that the cost exceeds the rent that you should be paying your landlord, says real estate attorney Steven Wagner of Wagner Davis PC.

“Keep in mind that tenants have an obligation to mitigate damages, so don’t move from a shared apartment in Bushwick into a suite at the Plaza and expect the landlord to pay the bill,” says Wagner.

Also bear in mind that you will probably need to take your landlord to court to recover the costs of alternative housing.

“Very few landlords are willing to write a check immediately to cover the tenant’s claim,” says Wagner. “With very few exceptions, it will be turned over to the landlord’s insurance company [which is] even less likely to do so.”

Most apartment insurance policies will not cover much if anything in the way of temporary housing expenses either, unless you purchased flood insurance separately.

“Extra expenses incurred due to an evacuation order or flooding from rising waters are typically not covered,” says Jeffrey Schneider, president of NYC apartment insurance brokerage Gotham Brokerage.

True, many insurers ponied up for extensive temporary housing coverage after 9/11, a terrorist attack that could have been treated as “an act of war, which is an excluded peril like flooding,” says Schneider. “In part it was a political and public relations consideration that forced the decision [to cover 9/11-related claims]. Is it possible that could happen now? I can’t answer. …”

That said, he advises, “there is no harm in putting in a claim and letting your insurer interpret the circumstances of your loss and your policy terms.”

FEMA assistance is another potential avenue; it is available to both renters and owners.

Here are the details as reported in the NY Times yesterday:

… FEMA announced over the weekend that it is offering victims of Hurricane Sandy vouchers good for up to two weeks in a hotel or motel, with the bills to be paid directly by the federal government.

The federal subsidy will cover the room only, not meals or other incidentals. In New Jersey, anyone displaced by the storm whose home is uninhabitable and is approved for coverage by FEMA is eligible, a federal official said Sunday. But in New York, the federal official said, families must apply through an emergency shelter to be eligible for the hotel program, at the request of state officials.

Either way, displaced families must pre-register with FEMA before they check into a hotel, as the agency will use computer databases to confirm that they live in the zone hit by the storm.

Victims of the storm can register for disaster assistance by calling the agency at 1-800-621-FEMA, visiting one of its registration centers that have been set up in the disaster zones, or by enrolling over the Internet at www.disasterassistance.gov. Mobile phones can also be used to enroll at m.fema.gov.

In cases where families move into temporary apartments, which state and local officials are helping them find, FEMA will in many cases provide rental assistance directly to the families, which will then be responsible for paying the landlords, a federal official said Sunday. This program will last up to 18 months.

Gotham Brokerage has been helping New York residents find apartment renter’s insurance, co-op insurance, condo insurance and homeowners insurance for 50 years. We took a hit from Hurricane Sandy, too, losing power, heat and phone lines. Our main phone is still on the fritz, but customers can reach us for now at 347-234-2935.

Author: Jeff Schneider
Gotham Brokerage Co., Inc. is a family run insurance brokerage serving New Yorkers for over 50 years. We specialize in the insurance needs for those living in the city and provide a full range of insurance products designed specifically for the city.