Credit: Jenifer Semenza
The knotty question of who is paying the bills never seems to die in the aftermath of Superstorm Sandy.After the floodwaters receded in Hoboken, NJ, I had two priorities. 1) assess the damage to my 46-unit condo building (I am board president), and 2) get items repaired as quickly as possible. I spoke to a number of people who filed for flood insurance last year after Hurricane Irene to get a sense of what to expect.
I braced myself for the worst. Arguing with insurance about what items would be covered, what percentage of the bill would be covered, those were all things I anticipated.
What I did not anticipate was not hearing anything. For weeks on end, I emailed my property manager asking for an update, only to be told the flood insurance adjustor had not even come for a site visit. Thanksgiving was approaching, and people were asking when the elevators would be repaired for furniture deliveries and visits from elderly relatives. With elevator repair estimates as high as $100k and repair times of 3-4 weeks, I could not give them answers.
The question that kept coming up was, how much will insurance cover? If the answer was 70%-80% like health insurance, then the board would have signed a contract on the spot and eaten the $20k-$30k of our portion. Our property manager manages 40 properties that were all FEMA flooded, and he went from optimistic about insurance coverage to increasingly cautious. We had to operate on the assumption that we would receive little to no reimbursement. Worse, the news kept changing about exactly what would be covered. Apparently elevator mechanicals are not covered but cab damage is!?
Five weeks after Superstorm Sandy, the board had had enough. We decided we could not wait to hear from flood insurance and to move forward with repairs on our own. After site visits from seven elevator companies, we went with the lowest bid, which was 70% less than original repair estimates. Tapping our healthy reserve fund to pay for repairs was the only logical option ? we decided to wait until all the financial dust settled to take stock of the association financials. In a worst-case scenario, e.g. zero reimbursement from flood insurance, a per-unit assessment would be less than $1,000. Nine weeks and two days after the arrival of Superstorm Sandy, we have still received no indication from our flood insurer as to what will be covered or when we will receive the money.
Flood insurance is a federal program. If this is the way insurance reimbursement is handled in a declared federal disaster area, I shudder to think what the response would be like under ordinary circumstances. To add insult to injury, my building is going to receive a fraction of the premiums we have paid over the years into the flood insurance program. Premiums over the last five years totaled around $60k, and the repair bill is almost identical. We would have been better off self-insuring (e.g. putting the premium money into a savings account) instead of paying into the black hole of flood insurance.
More:
Complete Sandy coverage
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Written by Kathy Zucker
Source: http://momcondoliving.com/2013/01/02/flood-insurance-%E2%80%93-the-wave-of-the-future/
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