Report: Hurricane Sandy Victims Still In Crisis As Insurance Settlements Delayed

Hundreds of frustrated East Coast property owners whose homes were damaged in Hurricane Sandy three years ago are still struggling with the cost of rebuilding from the storm as they wait for banks and mortgage companies to release their homeowners insurance claim settlement.

Insurers dispersed settlement money, but most people simply cannot access the claim settlement funds. That’s because large insurance claim settlement checks are typically made out to both the homeowner and their mortgage company.

Until the mortgage lenders endorse the settlement check and release the money, homeowners cannot use the settlement money to pay repair bills.

Factors Contributing To Insurance Settlement Check Delays

The homeowners insurance claim problem largely stems from standard mortgage banking practices colliding with the realities of a natural disaster like Hurricane Sandy.

While designed to prevent insurance claims fraud, the procedures have left homeowners waiting weeks for their settlement money, prompting them to delay repairs or dip into personal savings to pay contractors themselves.

When a disaster such as Hurricane Sandy hits, many factors come in to play that indicate the system is essentially broken.  For instance, resources across all parties are straining to keep up with the influx of insurance claims.

Insurance companies are not equipped with enough qualified adjusters to manage the thousands of claims from policyholders.  Additionally, restoration companies and other service providers are equally not prepared to meet homeowners’ requests.

These factors all play a part in the delay of settlement checks going out to both homeowners and their mortgage lender or loan servicer, which collects payments for mortgage bond investors.

Many victims of Hurricane Sandy say those measures are frustrating and causing financial difficulties. The insurance claims process, they complain, makes it difficult to hire contractors, who sometimes want more money up front than lenders will disburse. Some homeowners are so frustrated they are considering legal action.

Waiting for banks to send inspectors and approve contractors adds to delays. And it takes hours to reach banks and servicers by phone to explain the process.  This can leave the repairs in limbo, with contractors waiting on their portion of the funds to complete the necessary work.

What Does Homeowners Insurance Cover?

Homeowners insurance protects the homeowner against a variety of risks that come with home ownership. The benefits are designed to cover the home’s structure, personal property, the cost of living arrangements in case of home damage and certain other liabilities that may occur in the wake of a natural disaster like Hurricane Sandy.

Homeowners, like victims of Sandy, might be surprised to find they don’t have total control of their insurance claim checks. Because mortgage holders have a financial interest in a home and are named on the insurance policy, the companies take steps to protect that interest. That includes holding onto a chunk of repair money until homeowners provide proof that the damage is fixed.

Join a Free Insurance Property Claim Class Action Lawsuit Investigation

If you have experienced difficulty recovering insurance property claim money from your mortgage company, you may have a legal claim. Submit your information now for a free case evaluation. If you qualify, a lawyer will contact you to discuss the details of your case.

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