A waterlogged, damaged escalator leading to the platform at South Ferry station on the subway’s 1 line after Superstorm Sandy.
Credit: MTA New York City Transit
In the wake of Sandy, the Metropolitan Transportation Authority secured $200 million of insurance protection to pay for future repairs in the event of another storm with similar water surges.
Because of the surge from Sandy — which reached some 14 feet — several subways tunnels and rails were damaged or flooded.
The new insurance protection, which lasts throughAugust 2016,covers repairs incurred from surges following any hurricane, tropical cyclones or storms when water levels reach similar heights.
MTA head Thomas Prendergast said it was “exceedingly difficult” for the authority to obtain insurance through traditional avenues.
“But as a result of this savvy and novel reinsurance arrangement, we are now in a stronger position should our area, God forbid, face another large-scale storm-surge event within the next three years,” Prendergast said in a statement.
MetroCat Re LTD., a special purpose insurer, funded the protection through “catastrophe bonds.” The MTA said this is the first catastrophe bond ever issued solely against storm surges.
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