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Super-Storm Sandy’s Effects on the Insurance Industry

Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella...

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Reviewed byDaniel Walker
Licensed Auto Insurance Agenthttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/insproviders-live/ca745a12-daniel-walker.png

UPDATED: Mar 19, 2020

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super storm sandy radar

Source: Weather.com (AP Photo/NOAA)

As Hurricane Sandy was forecasted to hit the Northeast, estimates for damage were high. Precautions were made and people hoped for the best. Over 375,000 were under a mandatory evacuation in New York City alone, per order by Mayor Michael Bloomberg.

However, as the storm approached the coast, it became evident that conditions were worse than originally anticipated and there would be severe consequences.

With the event occurring so recently, only estimates can be drawn at this time. From the astronomical damages in the affected cities to the major insurance claims that have already and will be made, the cost of this storm is already staggering.

According to an article by Reuters, estimates from the disaster modeling company Eqecat place economic losses at close to $50 billion. Governor of New Jersey Chris Christie has given his estimate for the damages in New Jersey alone: $29.4 billion.

Make sure you have adequate insurance coverage no matter what comes your way. Enter your ZIP code into the online tool at the top of this page to see multiple rates for FREE.

Impact on Insurance Industry

One of the main topics of discussion will certainly center around insurance. Between not having enough coverage and debates of existing policies not covering all of the damages, most people affected by the storm will transition from survival mode to rebuilding mode, which includes dealing with insurance companies.

As mentioned in an article by InvestorPlace, early estimates propose losses could be up to $20 billion.

According to FEMA and the National Flood Insurance Program, many standard homeowner’s policies do not include flood coverage, especially for locations that are not prone to flooding. Unfortunately, many of these places include those affected by the storm. As quoted in an article by the Wall Street Journal, “many people aren’t aware they need the flood-coverage policies until it is too late.”

property damages from Sandy

Source: US News

Damage to the Auto Industry

Flood damage extends well past homeowners’ property, affecting most automobiles in the path of the storm surge. Damage from falling trees and other general debris will also make up a portion of auto insurance claims.

As stated by the New York Times, “Analysts say it is too early to speculate how many vehicles have been damaged by Hurricane Sandy, but the number could exceed the about 300,000 affected by Hurricane Katrina, given the vastness of the area hit.”

Besides the individual damages, many large auto dealerships have been majorly affected by losses in property and/or business, with dealerships shut down due to power outages.

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Property Damage After the Storm

Looting is unfortunately always a big story after a storm or natural disaster hits and the focus of security is removed. It’s not always about hunger and the need for sustenance either, as the majority of destructive looting is centered around electronics and alcohol. In the aftermath of Sandy, many evacuated homeowners are returning to their damaged houses only to find their possessions are gone.

When it comes to filing claims to your insurance company, whether home or auto, be sure to follow the proper procedures for the most accurate results.

The Boston Globe offers tips on how to best file a claim for damages caused by Sandy.

storm prep materials

Other Industries Affected by Sandy

While the insurance industry will surely take a major financial hit, many other businesses have benefited from the needs associated with storm prep and clean-up.

Home improvement and hardware stores raked in the cash as residents in the path of the storm attempted to prepare their homes and property by boarding up and stocking supplies.

As the re-building process begins, the same storms will supply materials.

Gas prices have noticeably dropped since the storm, while gas shortages and a new black market has emerged in some of the hardest hit areas, according to the Huffington Post.

Notable Relief Efforts for Sandy Victims

Amid the devastation and mounting needs following Sandy, many efforts are already in affect to raise money and supplies for those hit the hardest. To learn more about where and how to give, visit any of the following websites:

American Red Cross

redcross relief for sandy victims

Source: www.redcross.org

Feeding America

The Salvation Army

Hurricane Sandy Help Guide by StyleUnited

Obtaining Proper Insurance Coverage

For many victims, the first thought on their mind may not be on finding sufficient insurance coverage for the future. However, after the rebuilding process begins and a sense of normalcy returns, plans for increasing and/or applying for insurance should certainly be discussed.

One of the easiest ways of finding proper coverage at the best rates is to use the online comparison tool at the bottom of this page. Simply enter your ZIP code to be offered multiple plans according to your needs.

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