Hurricane Sandy (2012)
The storm that flooded New York and New Jersey in 2012, whose meteorological status at landfall decided which deductible applied to hundreds of thousands of claims.
Sandy did most of its damage through storm surge, which flooded lower Manhattan, the subway tunnels and entire coastal neighborhoods. Yet the system was no longer classified as a hurricane at landfall but as a post-tropical storm, and that technical nuance decided the deductible: policies in several northeastern states carried a hurricane deductible, expressed as a percentage of insured value, that applied only to a hurricane. New York and New Jersey officials announced it would not apply, which made the meteorological triggers in policies a drafting issue in their own right. In Manhattan data centers, water drowned fuel pumps installed in basements, and several sites held on only by refueling their generators by hand. The event also led New York's transit authority to seek parametric protection in the capital markets.
On October 29, 2012, Sandy made landfall near Atlantic City; insured losses topped 18 billion dollars according to PCS, and at 75 Broad Street in Manhattan, staff carried diesel by hand up to the eighteenth floor to keep a data center's generator running.
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