New Jersey property insurance holders were fortunate that Superstorm Sandy was downgraded by the National Weather Service to the classification of a post-tropical tornado shortly before it made landfall. Had Sandy been classified as a more severe weather event, insurance companies might have been relieved of much of their obligation to pay on the damage claims that were filed. Courts have made it clear to insurers that they must pay those claims.
But, it has taken until now for the question of whether PSEG’s insurance company must pay for the $500 million damages the energy utility incurred as a result of the storm. The insurer wanted to cap payout at $100 million but on March 23 legal judgement was emphatically entered in favor of the utility:
Essex County Superior Court Judge Thomas Vena granted summary judgment for PSEG in Public Service Enterprise Group v. Ace Insurance, and denied a cross-motion by the insurance companies.