Leading up to Memorial Day weekend, we heard a great deal from N.J. Gov. Chris Christie about how the Shore is open for businesses.
“This is the first symbol of us of making sure this week that everyone across the state, across the region, and across America knows that the Jersey shore is open for the summer and ready to receive our customers,” Christie said at a ceremony for the reopening of a boardwalk in Lavallette.
And while it’s true much of New Jersey’s coast is ready to welcome back the tourists, this idea that the Shore is “open” can irk some homeowners who are still waiting for aid money or insurance checks.
Kathy Romanelli, in the Toms River neighborhood of Sunset Manor, is one homeowner frustrated with the slow pace of her own recovery.
“I mean this is Memorial Day week,” Romanelli said. “Usually it’s bustling with people here, getting ready for the weekend. There’s no one here. It’s awful.”
Romanelli has a small bungalow that sits on the ground. It’s her second home, so she’s not eligible for any state or federal aid programs. And seven months later, she still battling with her insurance company over money.
“They want us to get estimates because their figures and the real prices are so far apart, that’s where the discrepancy lies,” she added.
Romanelli’s negotiated her claim to around $57,000. The insurance company first offered $22,000. “We’re thinking that if we got $100,000 we’d be happy,” she said.
Getting that much would mean not having to refinance her first home to pay for fixing this one. So she’s taken the day off work to meet a Home Depot salesman at her house to get an estimate.
Total project amount is $5,993 — that’s just for new windows.
Defining when a claim is closed
Across New Jersey, there were approximately 67,000 flood insurance claims filed due to Sandy. How many of them have been resolved or closed depends on the agency reporting the figures.
“We consider in New Jersey a closed claim to be a claim where the policy holder and the insurance company both agree that that claim is at a final resolution,” said Ken Kobylowski, the commissioner of New Jersey’s Department of Banking and Insurance. “The appeal process has run and both parties are satisfied.”
Kobylowski regulates the state insurance industry, but flood insurance is actually a program run through the federal government, the National Flood Insurance Program, and they do things differently.
“The National Flood Insurance Program, when they make a payment, they consider that claim to be closed,” he said.
The NFIP has reported to Kobylowski that 96 percent of claims are closed, using their definition. Using the the state’s definition, 78 percent of claims are closed. In other words, more than one in five claims are still being worked through.
Kobylowski says he thinks that’s a reasonable pace.
“This was the largest insurance claim event that we’ve seen in the state of New Jersey, and I think, by and large, the insurance industry’s stepped up very well.”
He cautions that there can be a difference between what homeowners think they should get and what they are entitled to under their policy.
Can you really get what you paid for?
Romanelli’s insurance policy for her vacation home only covers depreciated value of the damaged pieces of their home. That’s far less than the cost to rebuild and that doesn’t sit well. She thinks there’s no way damages minus depreciation could ever add up to the amount she’s insured for: $250,000. So she’s not sure why she was sold a policy for that much coverage.
“They’re charging us for something we’ll never ever be able to claim,” complained Romanelli. “We’ll never ever get paid out $250,000 on a little 750 square foot bungalow.”
Resources for resolving a disputed claim
Policy holders can appeal a claim decision within the NFIP’s internal process. If that doesn’t work, a policy holder can sue, but of course, that has its own expenses.
For non-flood claims, New Jersey has set up a mediation program, following the model of some gulf states after Hurricane Katrina. The policy holder can sign up to have an independent arbitrator settle their dispute at the expense of the insurance company.
Commissioner Kobylowski said he would like to include the NFIP into this program as well, but he since he has no authority over the federal program, he can’t require it.