Governor Cuomo recently announced that Superstorm Sandy, Hurricane Irene, and Tropical Storm Lee victims who have been denied coverage on their flood claims based on a controversial FEMA regulation, will be fully compensated through the New York State Housing Recovery Program.1 This is good news for the hundreds of Sandy victims whose coverage was either partially or entirely denied based on a technicality in their flood policies.
Many Sandy victims were prevented from recovering on their flood losses in spite of having flood insurance under the National Flood Insurance Program (NFIP) on the basis of what is commonly known as the “earth movement” exclusion. This exclusion, which can be found in Paragragh C in the Exclusions section of each Standard Flood Insurance Policy (SFIP),2 states in pertinent part:
We do not insure for loss to property caused directly by earth movement even if the earth movement is caused by flood. Some examples of earth movement we do not cover are: 1. Earthquake; 2. Landslide; 3. Land subsidence; 4. sinkholes; 5. Destabilization or movement of land that results from accumulation of water in subsurface land area; or 6. Gradual erosion.
Thus, damages caused by the movement of earth or soil are not eligible for coverage under the NFIP even if the movement was directly caused by flood. As a result of this exclusion many Sandy victims have been displaced and unable to rebuild their homes.
Governor Cuomo’s home rebuilding program seeks to redress this gap in coverage by providing rebuilding costs not covered under the FEMA plan. The program will be financed by federal hurricane grants and will provide much needed funding directly to eligible homeowners.
If you think you or someone you know might be eligible for assistance under this program contact the Office of Storm Recovery at 1-855-697-7263 or visit www.stormrecovery.ny.gov.
1 Governor Cuomo Announces Housing Recovery Program to Compensate Homeowners for Repairs of Damage Due to Storms Irene, Lee and Sandy. Available at http://www.governor.ny.gov/press/092821013-housing-recovery-program.
2 44 C.F.R § 61.13 (C).