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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Superstorm Sandy Lawsuit Filed Against Bankers Standard Insurance Company

April 28th, 2014 - Was it wind, or water? Owners of a New Jersey Shore home have sued Bankers Standard Insurance Co. after it denied their repairs claim stemming from 2012’s Superstorm Sandy.

Joseph Zawadsky, Marilyn Zawadsky and Carol Martinez, trustees for a trust that owns the Mantoloking, N.J. home in question, had purchased insurance on the oceanside property effective June 15, 2012. They had coverage from the ACE Group unit for both property damage and loss of personal property.

Then came Sandy. On October. 29th, 2012, Sandy struck the area with high winds and a surge of storm water at high tide. Winds of 81 mph battered the shoreline and, said the trustees, broke windows in the home and ripped the roof off and deposited its shattered remains on a nearby driveway.

According to the complaint, the cost to replace the home is estimated at $2.954 million. Personal property damage was estimated at $284,705.

Policy limits were $1.712 million for the dwelling and $1.198 million for personal property. Though the policy limit was exceeded for the home, the plaintiffs said they have full replacement cost protection from Bankers Standard.

Initial claims reports on the home ascribed the damages as due to water damage. Plaintiffs or their representatives repeatedly advised the insurer that this was not the case, and wind was the culprit.

On January 15th, 2013, Bankers Standard denied the claim on the grounds that damages were due to a storm surge.

Plaintiffs then hired their own engineer who disputed this. Their position was that maximum winds from Sandy were 81 mph and were recorded at 7 p.m. on October 29th, while the maximum storm surge did not occur until 3 a.m. the next day. By then, maximum winds had tailed off to 52 mph.

Plaintiffs further contended that if water had caused the roof to fail it would have collapsed downward. Instead, it blew off, westward.

Plaintiffs accused Bankers Standard of dealing in bad faith and asked the federal court in the District of New Jersey to declare that the insurer has a duty to reimburse them for all damages and losses.

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