Flood insurance and basements
A group of owners of hurricane-damaged homes have brought a putative class action in federal court in Newark, arguing that their flood insurance carriers are short-changing them by calling their first floors "basements". The case is Donnelly v. New Jersey Re-Insurance Co., Docket No. 12-cv-7629, and was filed by Union City solo Jeffrey Bronster.
FEMA policies define a "basement" as a space with all four walls underground, but, according to the plaintiffs, many homes have a first floor that is partially underground. The difference is significant because the policies provide lower coverage, or none at all, for damage in the basement. The class representative is Patrick Donnelly, who had his home damaged by Irene. The carrier deemed the first floor the "basement", even though the rear wall of that floor is entirely above ground. (I'm sure this is going to be an issue with Sandy claims as well.)
The eight named defendants are New Jersey Re-Insurance Co., which is a subsidiary of New Jersey Manufacturers Ins. Co.; Fidelity National; Hartford; Liberty Mutual; Selective; Philadelphia Contributionship; State Farm; and Travelers.