public housing

An excerpt of my piece for the Connecticut Law Tribune about the legal impacts of Superstorm Sandy:

 Superstorm Sandy struck a less-devastating blow to Connecticut than it did to New Jersey and New York. Still, the Oct. 29, 2012, hurricane cut a wide swath in terms of affecting the state's legal community.

There are expectations of litigation over insurance coverage. Attorneys working for governmental agencies have helped to put into place better disaster planning. And there have been pro bono efforts to assist storm victims.

As of May 2013, 47,002 residential-property claims were reported in Connecticut as a result of the storm. There were also 4,460 commercial-property claims, 2,772 flood claims, and 1,212 business interruption claims, according to the Connecticut Department of Banking & Insurance.

Disaster Litigation

While it's been nearly 14 months since the storm hit, Sandy-inspired litigation will take a while to fully develop, said Ryan Suerth, of Ryan Suerth LLC in Hartford, who represents policyholders. He explained that it often takes more than a year for policyholders to learn that their insurance claims have been denied or that they will get less money than they had hoped.

"Any major weather is going to lead to litigation, just for the reason there is a lot of damage and not all of it gets covered by insurance," Suerth said.

Michael McCormack, a Hinckley Allen attorney who chairs the Connecticut Bar Association's Insurance Law Section, said he has seen few Sandy-related claims being filed in court so far. One reason, he said, is "the insurance companies responded quickly. They worked with policyholders as best as they could." Secondly, he said, many consumers lack flood insurance, meaning that instead of making a claim on their homeowner's policy they must apply to Federal Emergency Management Agency's National Flood Insurance Program.

But Regen O'Malley, an insurance defense lawyer with O'Connell, Attmore & Morris in Hartford, predicted that Sandy will ultimately result in more legal activity than did 2011's Tropical Storm Irene. One insurance issue that often prompts legal disputes is the question of whether property damage was caused by rain or flooding.

"It really depends upon what the policy says [is covered] for those types of claims," O'Malley said. "And with [Hurricane] Katrina and now Sandy, there might be multiple causes. There might be wind, flood, storm surge and something else."

For some policies, coverage is denied if multiple factors caused damage and some of those factors are not listed in the policy.

 Gregory Podolak, of Saxe Doernberger & Vita in Hamden, explained that some homeowner polices cover only "named perils." The most common of these include lightning, fire, rain, windstorms and theft. But exactly how these terms are defined in a specific policy can have a dramatic impact on a consumer's "coverage position," Podolak said. Many policies have specific deductibles and coverage limits related to specific named perils, he added. And Legal issues arise when there are multiple perils that could have caused property damage, he agreed.

Another insurance issue arising from Sandy is business interruptions caused by the loss of electric power. Some parts of the state lost power for a week or more, and businesses filed claims seeking lost revenues for days they could not operate.

"What Sandy and Irene have done is highlight some of the issues that don't come to the forefront as often," Podolak said.

Cases that do go into litigation may involve claims of bad faith by insurers and violations of the Connecticut Unfair Trade Practices Act and the Connecticut Unfair Insurance Practices Act. There also may be litigation against insurance brokers and agents for allegedly not recommending sufficient coverage, attorneys said.