93% of New York, New Jersey claims from Sandy settled

The majority of claims received in New Jersey and New York following Superstorm Sandy have been settled, and estimated insured losses make the storm the third costliest in U.S. history, according to the Insurance Information Institute.

Insurance regulators have reported that 93% of the claims received following Sandy have been settled, the Institute said Monday.

Of the 1.5 million claims for damage to homes, vehicles, boats and businesses damaged by the storm were filed in either New York or New Jersey, the Institute said.

The Institute estimated that insurance companies will pay $18.8 billion in claims, making Sandy the third costliest storm in U.S. history (in terms of insured losses), behind Hurricane Katrina in 2005 ($48.7 billion) and Hurricane Andrew in 1992 ($25.6 billion). All figures are based on 2012 U.S. dollars.

Katrina and Andrew were both hurricanes when they made landfall in the U.S., while Sandy was a post-tropical cyclone, the Institute noted.

Nearly 1.1 million claims came from homeowners following Sandy, while a quarter million came from vehicle owners and about 200,000 came from business owners, the Institute said.

While business claims represent only 13% of all claims filed, they will be about 48% of all the claims dollars paid, the Institute added.

“The reason is that the value of commercial property is often higher than that of home properties and thus the cost to repair or rebuild is greater,” the Institute noted.

“In addition, business interruption coverage reimburses a business owner for lost profits and continuing fixed expenses during the time that a business must stay closed because of physical damage to their premises.”

The $18.8 billion estimate does not include flood damage insured under the U.S. government’s National Flood Insurance Program.

“The billions of dollars that private insurers paid to home, business and vehicle owners have helped to stabilize the economies of states hard hit by Sandy,” Dr. Robert Hartwig, president of the Institute and an economist noted. “Those same dollars also helped to spur growth and create more resilient communities for the future.