In a lawsuit filed in Superior Court in Essex County last month, Public Service Enterprise Group and three of its subsidiaries accused 10 insurance companies of shortchanging them on coverage that should have reimbursed them $456 million for damages to their power grid.
Instead, the insurers say they will only cover $50 million in payouts, arguing that provisions in the policies restrict reimbursements above that amount in specific flood zones, a matter disputed by PSEG and its subsidiaries in the 19-page lawsuit filed on June 18.
The dispute has big implications for utility customers, who could end up paying the bill to repair the infrastructure if the insurance companies’ view is upheld by the courts.
Public Service Electric & Gas, the state’s largest gas and electric utility, is not alone in suffering huge harm to its power grid after Hurricane Sandy, a storm described as the most destructive to ever hit New Jersey.
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