Superstorm Sandy Challenges Definition of Basement in New Jersey

January 21, 2013
downstairs-apartment

  • January 22, 2013 at 8:24 am
    Don Quixote says:
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    Why didn’t they challenge the definition BEFORE they had a loss? These people read their policies, right????

    Let’s see, it’s flood insurance. Where does water go? It goes down. My “living space” is in a basement below grade. Where will the water go?… HMM…. Into my living space! Yeah! I’m sure I’m a great risk.

    By the way, stop saying this has anything to do with Insurance companies. They don’t write the flood insurance policies or the rules. They simply administer the paperwork for a fee. Any claims are paid by the Federal Government and are subsidized by ALL Taxpayers. So, for all you folks who DON’T live where it floods, you’re paying for the people who do. And you’ll keep paying every time they rebuild and flood again. And you’ll pay even more if any of these bogus lawsuits go anywhere.

    The American Taxpayer – paying for stupidity and loving it.

  • January 22, 2013 at 10:25 am
    InsGuy says:
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    One of the duties as a policyholder is to do what you can to mitigate damage, where possible. If your on an island and a hurricane is coming, move your $8,000 couch out of your basement!

    Notice I said HURRICANE and BASEMENT. Why do people, and those seeking votes, always want re-define terms AFTER THE LOSS?

  • January 22, 2013 at 10:38 am
    Ray says:
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    No one reads their policies, user agreements, or contracts. They rely on a broker or lawyer to tell them what’s inside, and then just sign it. If there is no one there to tell them what’s inside, they just sign it anyway.

    It’s very reassuring our government takes this “sign into law then read the bill” approach as well… Expect to see tons of these types of suits/complaints.

    • January 23, 2013 at 3:27 pm
      InsGuy says:
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      Ray, While I agree with what you’ve said, I would point out a couple of things.
      1) They must rely on an agent or lawyer to interpret their policies. Most policies are written in leagal-ease.
      2) They must sign, because most mortgage require this coverage prior to approving the loan.

      The days of common sense are gone, and I’m not sure we can get them back. I hate to say it, but it really has become a nation of the lawyers, by the lawyers and for the lawyers.

  • January 22, 2013 at 12:48 pm
    truth says:
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    Problem is very few read their policies.All policies have excusions &/or exceptions. It is clear, per policy definitions, this area is below ground level on all four sides therefor it is a BASEMENT!
    They have Auto insurance so expect all auto claims to be covered, same with HOMEOWNERS and all others.They are NOT!
    Read your policy, ask questions of you agent and insurance company (in writing)or your lawyer!!!
    Everyone wants coverage after the loss and it just does not work that way.
    So, blame the insurance company’s for your lack of due diligence.

  • January 22, 2013 at 1:54 pm
    TxLady says:
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    3 feet below ground level is a basement. You may use it as your living space, or rent out a basement apartment where the windows you look out of are at street level, but that is still a basement. The NFIP has stringent rules on what it covers and what it does not. This is not new, it has been that way for years. Sad for these folks that they had to find out this way that they were not covered.

  • January 22, 2013 at 1:54 pm
    jim says:
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    What!!?? You mean my NY homeowners policy won’t cover my truck where all of my belongings are stored and where I live throughout the week with my pitbull? What if sombody breaks a side window and steals my green card, I-pad, computor and 9mm Kimber and gets bit in the process…aren’t I covered? What’s this country coming to?

  • January 22, 2013 at 2:04 pm
    WyomingAgent says:
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    “Jersey City resident Patrick Donnelly is suing a number of insurance companies, saying he and others were denied damage claims after Hurricane Irene in 2011 and Sandy. A judge will decide if the suit can move forward as a class action.”

    What part of National Flood Insurance Program don’t you understand? Insurance companies don’t write the rules, don’t enforce the rules and don’t pay out on flood claims. We just sell it for the Feds. Sue the US Government instead. Good luck with that, I am sure their lawyers are better than yours. (At least more expensive, thanks Mr and Mrs Taxpayer.)

    • January 22, 2013 at 4:48 pm
      caffiend says:
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      You have to remember that the government is broke… That’s why they have to borrow so much money. Obviously you sue the insurance companies because the all are evil corporations looking to get rich from the little people that pay and pay and pay, and then get nothing when a loss happens.

    • January 23, 2013 at 10:27 am
      jw says:
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      I know very little about the NFIP. Do agents look at the property when they submit the applications? I’m just thinking about the picture with the article. If the person ONLY lives on ONE level (of a multilevel bldg), and that level is legally defined as below street level, shouldn’t the agent know the insurance is useless?

      • February 13, 2013 at 9:58 pm
        Jeff says:
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        The issue is that homeowners are paying for full policies and are mandated by mortgage companies before obtaining a loan. If you read the NFIP issued flood insurance policy and look at the literature provided by FEMA, the policies are clearly written for a typical home – not in an urban environment. There are conflicting clauses in the policy (like saying all UNITS in a condo complex are covered), but most insurance agents have interpreted these street level residences as basements because they have to pay out less.

        Also, the way that the NFIP is structured in that private insurance carriers administer the policies and only pay out what they collect per year. Anything beyond that and the federal government subsidizes it – this way these companies don’t lose money.

        No one realizes that their policies don’t actually cover their units until a flooding incident. Insurance carriers are more than happy to sell policies, yet they don’t actually evaluate your home before selling it and are basically selling products falsely. There is no option of paying a proportional rate for the amount of coverage you actually get.

  • January 22, 2013 at 2:38 pm
    Agent2 says:
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    Even if flood wasn’t recommended, with recent storms & publicity regarding insurance, you’d have to live under a rock to not know homeowners doesn’t cover flood yet the courts allow “my agent didn’t tell me” as a cause of action. Preposterous.

  • January 22, 2013 at 3:00 pm
    Scott says:
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    On the other hand, look at the picture. If those stairs were on the back side or inside of the building, there’d be no question. It appears her unit IS on the ground level; not below it. The second floor is on top of hers, but the steps required to get there are on the outside…..coming off of the street level. I can appreciate her confusion.

  • January 22, 2013 at 3:08 pm
    NFIP agent says:
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    The definition of basement has been part of the flood policy and part of the Federal policy language for over 30 years. It is an issue in every flood and prople are unhappy, but if the floor is below ground on all sides, the area is a basement. End of definition; end of story. Of course, if you are located solely on that level, then the entire structure/home/apartment/shop etc. is a basement and is ineligible for a Natioanl Flood Insurance policy.

    • January 23, 2013 at 10:30 am
      jw says:
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      I think the problem is, these people ONLY live on ONE level which is partially or completely below street level. They don’t have anywhere else to take their property; the upper levels are occupied by other people. How do these basement homes get any coverage?

  • January 22, 2013 at 4:50 pm
    caffiend says:
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    Expect to see a number of E&O claims against agents for not properly advising insureds that their belongings which are kept below ground level are not covered.

    • January 23, 2013 at 11:58 am
      SWFL Agent says:
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      I wouldn’t disagree that the E&O claims may occur but what other options would the insured have even if the agent didn’t explain it properly? I am not aware that the insured could have chosen a different policy with more or differnt coverage. I guess they could have chosen not to make the purchase.

      • January 24, 2013 at 10:36 am
        FFA says:
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        Insure properly? sounds like a good option.. Better then sue after the fact.
        Not living in a flood zone is also another good idea.

  • January 22, 2013 at 4:58 pm
    Jason says:
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    According to the article the sewage backed up and came up through the drain. Should this person be seeking coverage under a sewer and drain backup endorsement on their homeowners policy instead of flood coverage with the NFIP?

  • January 23, 2013 at 1:12 pm
    KA says:
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    Rita Hollada does a wonderful job of explaining a variety of flood related issues from the Agent perspective. You may wish to check out her blog post on “What is a basement?”

  • January 24, 2013 at 8:43 am
    mmm1 says:
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    So the assumption is that one can sign a contract yet somehow not be bound to the terms they have agreed to? You gotta love this new age where not one is responsible for their actions, particlualry if the result is not to their liking.

    • January 24, 2013 at 10:38 am
      FFA says:
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      Athletes do it all the time. Why should I?

  • January 24, 2013 at 3:21 pm
    MKM says:
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    The government has time and time again refused to update the national flood insurance plan-they just keep extending the current coverage knowing full well that the plan needs updated. No one should be allowed to build in a area that is prone to flooding. It should slso be required that flood insurance only pays when a person agrees to move to an area that is not prone to flooding when they have a claim. You cannot fight mother nature and the natural terrain and it is not fair to constantly ask the tax payer to pay for floods in the same area over and over. If it floods, do not build!

  • January 24, 2013 at 4:36 pm
    Comptown says:
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    The problem is clearly with the agent thaif they didn’t explain the definition of a basement. If I’m selling the NFIP policies in a major city where basement living is common, I would have my file well documented, if not guess who’s getting sued.

  • January 28, 2013 at 4:17 pm
    William Edwards says:
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    Definition of “Basement” (Noun) – The floor of a building partly or entirely below ground level.

    Source: http://oxforddictionaries.com/definition/english/basement



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