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Superstorm challenges definition of basement in NJ

Published on NewsOK Modified: January 20, 2013 at 1:49 pm •  Published: January 20, 2013

"We're seeing situations where the insurance company is denying claims in buildings we do not believe met the definition of a basement," said Jeffrey A. Bronster, Donnelly's lawyer.

Jersey City mayor Jerramiah Healy said he thinks the lawsuit is a "valid argument."

Elsewhere, "traditionally a basement is where you throw stuff. It's 8 to 10 feet below the ground," Healy said. "Here in Jersey City we have a lot of places that are ground level or 3 feet below. It's living space."

Property owners with a mortgage are required to have federal flood insurance. The policies are issued by private insurance companies.

Robert Hunter, director of insurance for the Consumer Federation of America and former federal insurance administrator, said insurance is typically calculated on the ground level of a structure. Anything below that is typically classified as a basement, he said.

The basement issue rarely came up after Hurricane Katrina, Hunter said, because so many Gulf Coast homes were built on slabs.

"I've been fighting this battle for a long time," Hunter said. "I think they're too stringent in how they interpreted those basement rules."

Sitting at her kitchen table recently, Sobolov looked at a bathroom that no longer had walls, a sink or a toilet. Its door was propped up against a wall in her living room, a decades-old brown sign reading "please keep this door closed at all times" in both English and Spanish hanging from a nail. Previous owners put the sign on the door and added on the living room, which was deemed a porch by the insurance company. The floors and bottom of the walls are ripped up. The back door opens onto a few steps up into the backyard.

Sobolov said she is challenging the assertion that her home was flooded because of her claim that what came up through the toilet and drain damaged her home. But because the insurance company declared her home flooded, she is also fighting the basement classification. There was about a foot of water and sludge in her home.

She and her husband have owned the home for 12 years and pay about $2,500 a year in flood insurance, Sobolov said.

"They collect our money for 12 years and only now it's, 'Oh, I forgot to tell you, we don't cover you?'" she asked.

Sobolov received $5,000 from FEMA, she said, and is supposed to get another $6,000 under her flood insurance. She said she has a $250,000 flood insurance policy. Contractors estimated the damage will cost $60,000 to $80,000 to fix. Additionally, many of the family's possessions, including the stove, dishwasher and furniture, were destroyed.

A basement, Sobolov said, would be an amenity in cramped Hoboken.

"How many people in Hoboken," Sobolov asked, "have the luxury of having a basement in their house?"