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.