Hurricane Sandy Class-Action Lawsuit Says Insurance Companies Fudged Damage Claims

Victims of Hurricane Sandy and Hurricane Irene in New Jersey have filed a class-action lawsuit against nine insurance companies that allegedly denied their claims by misinterpreting the definition of a basement.

Many residents who live in ground-floor units didn't receive insurance compensation because their homes were classified as basements, and insurance companies often offer limited compensation for basement damage, the Jersey Journal reported.

Related: Home Insurance: What's Covered, What Isn't

The lawsuit names Fidelity, State Farm and Travelers, among other national and local insurance companies, as defendants, and the plaintiffs are "everyone in New Jersey insured by the companies named in the lawsuit," the Journal said.

The only individual plaintiff named in the lawsuit is Patrick Donnelly, who was allegedly denied a claim after Hurricane Irene flooded the first floor of his house. He had flood insurance, the lawsuit said, but the ground floor was classified as a basement.

"[Donnelly's first floor] is not elevated, but it is not a basement either," Jeffrey Bronster, an attorney representing the plaintiffs, told the Journal. "It gets very technical."

The insurance companies have not commented on the lawsuit.

The plaintiffs are seeking compensatory damages and pre-judgment interest.

See also:
Hurricane Sandy Victims' Electric Bills Show Charges for Power Despite Blackout
Hurricane Sandy Batters Home Sales in Storm-Affected Areas
Home Insurance for Hurricanes and Floods

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