Originally from Dispute Resolution Journal

I. INTRODUCTION

In late October 2012, people across the Atlantic had more to fear than just Halloween. Hundreds of lives were lost and millions more were impacted in the wake of Hurricane Sandy.1 At first blush, it is easy to be consumed by the loss of loved ones and sentimental items. But for victims of natural disasters, that is only the beginning. A little over a year later, as the initial shock fades, those whose worlds were shattered by Sandy struggle to rebuild their daily lives. In New York alone, approximately 305,000 housing units were damaged.2 On top of the stress of being displaced from their homes, or having their businesses disrupted, the survivors must find ways to bear the costs of restoration.

Sandy is a recent example, but by no means an anomaly. Over the past five years, hurricanes have caused at least 229 deaths in the United States,3 and have resulted in billions of dollars in damages.4 Most homeowners are insured,5 but in the face of natural disasters, payouts are often not as simple as filing a claim with an insurance company. Following a large-scale disaster, insurance companies are sometimes ruined by excessive disbursements.6 Further, natural disasters usually bring about multiple forms of damage—wind, storm surges, flooding, tornadoes, rip tides, etc. - and insurance policies may only cover certain types of damage.