Group Warns of Possible Insurance Problem Post-Sandy

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A consumer group is warning that some people whose homes were damaged or destroyed as a result of Sandy may be denied coverage.

Many home insurance policies contain so-called anti-concurrent causation clauses. Bob Hunter of the Consumer Federation of America says this language makes it easier to deny coverage if two factors — like flooding plus fire or wind, destroyed a home at around the same time.

“If there are two events damaging the same structure and one is covered and one is not, the insurer can deny both,” he explained. It was an issue that affected some claims after Hurricane Katrina.

But New York's Department of Financial Services says there is no indication that this will be an issue. The department said in a statement that it is watching and will intervene should the issue arise and become a problem.

Fire destroyed more than 100 homes in Breezy Point, Queens as Sandy swept through.