And while homeowners and businesses have been more willing to purchase flood insurance in recent years — especially after August 2011, when Irene swamped land that had been dry for decades — it is still expected that billions of dollars in Sandy losses won't be reimbursed by insurance.
Wells Fargo Insurance is one of the nation's largest insurance brokers, advising homeowners and businesses when they purchase coverage from insurance companies. Peter Gilbertson, based in Madison as regional managing director for the Northeast, said "it didn't take Irene to suddenly wake the insurance industry up to the need to be very conspicuous and very unambiguous" that standard policies don't cover floods.
He said there's an expectation in the industry that Sandy will generate "quite a bit of uninsured or underinsured flood losses at both the commercial and the consumer level. But it will take some time to sort out just where it stands." While flood damage is excluded, wind damage usually is be covered. "Sometimes being overwhelmed with water intrusion can be attributed to covered perils under the policy, like wind. But I would say there are going to be a number of uninsured or underinsured losses due to water intrusion."
He said flood insurance is an expense that consumers and businesses forego if they calculate their risk is low.
"Flood insurance is perceived as expensive, but price is not the only factor," Gilbertson said. "There will probably be a lot of flood losses in the wake of this storm that are incurred by people who didn't consider themselves to be flood prone."
Calls to New Jersey Manufacturers Insurance Co. in the wake of Sandy were closely tracking the call volume following Irene, which resulted in 22,000 claims, according to spokesman Eric Stenson.
"Flood damage is not covered under the homeowners' policy, but hopefully a lot of people learned from the Irene example, and if they were in areas that were at risk, they did obtain flood coverage," Stenson said. NJM opened its West Trenton office on generator power last Tuesday, Stenson said. "It was a challenge, but also a big opportunity — we are supposed to be there for our policyholders, and this is really the situation where they need us the most."
Allstate spokeswoman Joyce Buford said the storm knocked out power to the company's office in Bridgewater. Allstate deployed "mobile claims centers" — essentially, offices on wheels — in Hazlet and Wall, and has "catastrophe response vehicles" driving around the state. She said the company's agents are alerting Allstate to potential instances of fraud "where contractors are asking for cash deposits on roof repairs and water service. This is something homeowners need to be aware of — don't get involved with unscrupulous contractors."