Regional news:
Nine insurance companies sued over ‘basement’ definition after Sandy
Update Jan. 4, 2013. Breaking news: House and Senate approve Sandy aid for NFIP. Click here.
A Jersey City man has filed a class action lawsuit against nine insurance companies that he says denies claims based on the definition of the word “basement.”
Patrick Donnelly, the sole plaintiff, has filed against local and national insurance companies, including Liberty Mutual, Travelers, Hartford and State Farm. The companies named in the suit participate in the federal Write Your Own flood program, which allows insurance companies to work with FEMA to write standard flood insurance policies (SFIP) in their names.
Donnelly claims the companies denied claims following Sandy for personal and business damages.
Donnelly’s suit stems from a flood claim he made following 2011’s Hurricane Irene, which was denied. Donnelly had flood insurance through New Jersey Re-Insurance Co., and says his claim was denied because his ground floor was characterized as a basement.
According to reports of the suit, the insurers were named as plaintiffs as claims denials were made by FEMA at the request of the insurance companies.
The SFIP defines a basement as any area of the building…with its floor below ground level, and offers limited coverage for damages in basements, according to Donnelly’s complaint.
Donnelly’s complaint alleges the insurance companies breach contracts with insureds by denying claims based on an “erroneous classification” of a basement, as he alleges happened to him, particularly following hurricanes Irene and Sandy.
Other insurers named in Donnelly’s suit include New Jersey Manufacturers, Liberty Mutual, Selective, Assurant, Fidelity National and Philadelphia Contributorship.
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The U.S. House today approved a $9.7 billion bill to refund the National Insurance Flood Program (NFIP), which would help pay for flood insurance claims related to Superstorm Sandy.
3 Responses
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vince phillips Says:
December 30th, 2012 at 6:07 amMaybe I’m slow but NFIP has specific rules re what a basement is. Unless the WYO companies are deciding on their own at variance with NFIP policy, the lawsuit would appear to be mis-directed wouldn’t it?
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Phil Taravella Says:
January 4th, 2013 at 10:44 amI own a home with a basement below ground level that I am now being told is not a basement even though my insurance company paid out on an Isabel claim. I filed a second flood claim in 2009/10 and it was denied because it is not a basement based on their new definition.
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gerald vaughn Says:
January 5th, 2013 at 6:35 pmAll insurers are bad faith insurers. They try and get out of any and all claims. they low ball pay outs if they don’t just deny your covered claim out right. Get yourself an attorney if you had flood and weren’t paid or if you had any other damage that was covered and wasn’t paid. never settle out of court once you are forced to sue. Always after you win file a separate bad faith lawsuit for damages that were caused by the denial that aren’t normally covered by your policy. Your insurer in most states must pay every penny of your legal fees and punitive damages when you win, so its to your advantage to teach these A-holes a lesson. I’m suing AIG a.k.a. 21st century insurance for blatantly denying covered claims and you should to. Remember your insurance company is corrupt and you should treat them a such. Record all phone calls and adjuster meetings for court.
