NJM Estimates Sandy-Related Claims Could Exceed $300 Million
December 5, 2012
WEST TRENTON, NJ — With more than 52,000 Sandy-related claims filed to date, New Jersey Manufacturers Insurance Company (NJM) anticipates that payouts to policyholders who have suffered covered losses could exceed $300 million, four times what it paid as a result of Tropical Storm Irene. Irene was previously the largest claims event in the Company's 99-year history, with a cost of $75 million. The Company has already closed an estimated 45% of Sandy-related claims and disbursed payments totaling nearly $100 million to policyholders to help them repair, replace and rebuild damaged property.
Though the expected payout is significant, NJM's balance sheet is designed to respond to the covered claims of its policyholders in this type of event. In its most recent evaluation by A.M. Best Company, Inc., the nation's leading credit rating analyst for the insurance industry, NJM was awarded an A++ (Superior) for financial strength — the highest possible rating — and policyholders can be assured that, where coverage exists, payments will be made.
NJM Insurance Group is the Garden State's third largest underwriter of Homeowners coverage, insuring approximately 280,000 households throughout the State, and is the largest provider of Personal Automobile insurance, with approximately 800,000 insured vehicles. The most common homeowner loss being reported is related to wind damage, while the most common cause of automobile loss is related to flooding.
Flood insurance for homes is available through the National Flood Insurance Program (NFIP). The NFIP is a federally created program designed to provide insurance for flood losses, including storm surge, which are not covered by a Homeowners policy. New Jersey Re-Insurance Company, NJM's subsidiary, is a participant in the Write Your Own (WYO) federal flood program in the region impacted by Sandy and underwrites approximately 10,200 Flood policies for the entity. To date, 4,600 flood claims have been filed on those policies, representing 45% of the book. Flood claims are settled by specially certified, independent adjusters pursuant to rules established by the NFIP. During the claims process, NJM staff serves as a liaison between claimants and adjusters.
NJM's President and Chief Executive Officer, Bernie Flynn, emphasized that the Company's number one priority is helping policyholders recover from the damage Sandy left behind, stating that "we recognize our policyholders need us now most of all. Regardless of the volume of claims, or the ultimate cost, our policyholders who sustain covered losses can be sure of our commitment to helping them during this difficult time. The entire NJM staff, and our trusted partners, have been working around the clock and will continue to do so until all service obligations are fulfilled."
In addition to Personal Automobile and Homeowners insurance, NJM, which will achieve its 100th anniversary in 2013, is the leading provider of Workers' Compensation insurance in New Jersey and a major carrier for Commercial Auto coverage. To be eligible to apply for Workers' Compensation or Commercial Auto, an employer must be a member of the New Jersey Business & Industry Association (NJBIA). Applicants for Personal Auto or Homeowners insurance must meet membership eligibility criteria.