ALBANY - New York's insurance chief on Thursday warned that some insurers are trying to get out of payouts under flood insurance for damage from Tropical Storm Irene.
Financial Services Superintendent Benjamin Lawsky said no insurer should even consider denying payments under a flood insurance policy because damage from the storm is clearly covered. He also said insurers shouldn't try to enforce a deductible for "hurricane damage" in flood insurance because Irene was downgraded to a tropical storm by the time it hit New York. He said the deductible would have cost a resident or business thousands of dollars unnecessarily.
But that doesn't help the majority of New Yorkers hit by the storm who don't have the additional flood insurance. Standard homeowners' and renters' insurance doesn't cover flooding.
The national Insurance Information Institute said fewer than 20 percent of Americans have flood insurance, which can cost just a cou ple of hundred dollars a year under the National Flood Insurance Program.
In 1968, the federal government became involved in providing flood insurance to residents if their communities joined the program, which requires local governments to agree to measures aimed at minimizing damage from flooding.
Many of the municipalities hardest hit by Irene from the Adirondacks to the Hudson, Schoharie and Mohawk valleys and Long Island opted into the program. That means many of the affected residents could have bought flood insurance, but weren't obligated to, according to the Federal Emergency Management Administration.
State Insurance Department's disaster hotline at 1-800-339-1759 from 8 a.m. to 8 p.m.
FEMA officials said many of Irene's victims upstate don't have flood insurance.
"The percentage of Americans with flood insurance is less than 20 percent, lower when you go inland," said Michael Barry of the nonprofit insurance institute funded by the industry to inform consumers. "And we're seeing a lot of inland flooding."