As many Garden State homeowners begin the process of dealing with insurance companies and the Federal Emergency Management Agency, they’re learning sticker shock doesn’t just come at closing time.
"We need to ensure that homeowners are not forced to pay higher out of pocket costs than required as they begin the rebuilding and repair process," Gov. Chris Christie said when signing an executive order prohibiting insurance companies from imposing costly hurricane deductibles.
"This executive oder makes it clear that consumers do not have to pay these unusuaully large and unexpected amounts."
The National Weather Service categorized Hurricane Sandy as a post-tropical storm before it touched ground in New Jersey, thwarting the first regulatory mandate for applying a hurricane deductible.
It’s a costly distinction for homeowners; typically a hurricane deductible is between two and five percent of the property’s insured value. A four percent hurricane deductible on a $500,000 home would require the homeowner to pay $20,000, according to a statement from the governor’s office. A typical deductible ranges between $500 and $2,000.
Christie’s executive order also mandates that insurers and other regulated businesses use proper tolerance on collection and cancellation; relax documentation and other requirements; and reduce insurance burdens on healthcare providers and patients.
Under the executive order, insurance companies can pay certain claims via pre-paid debit cards or other alternative methods so residents can receive emergency funds more quickly, whether for temporary repairs or to cover living expenses as the Garden State begins to recover.
Adding to the misery, homeowners along the Jersey coast must show their damaged or destroyed home is their primary residence, not a vacation or second home, in order to qualify for FEMA assistance; this leaves many to rely on their insurance companies.
“The home in the disaster area is where you usually live and where you were living at the time of the disaster,” according to FEMA’s policy.
At Camp Jefferson today, FEMA community relations staff told locals the disaster recovery funds have to be divided between the state and federal agency. Their advice is to file a claim and be persistent, the Star-Ledger reported.