Besides D.C. and Rhode Island, New York, New Jersey, Connecticut, Pennsylvania and Maryland have made similar statements to insurers.

Alldredge says the states acted based on a decision by the National Weather Services just before Sandy's landfall to change its designation from a hurricane to an "extra-tropical cyclone."

But he contends that the NWS acted despite the fact that Sandy had all the characteristics of a hurricane, which would have triggered the deductible.

"These deductibles are important risk-management tools," Alldredge says. "An insurer makes decisions on the coastal property they will underwrite based on these practices. This changes the economic impact on insurers.

He adds, "We recognize that there is a human element to all of this. We acknowledge that it will change the out-of-pocket costs for a person with a loss," but he explains that "insurance companies need to rely on the certainty of the policy language and to after-the-fact determine that that language is not enforceable alters the economic decision-making that a company can make."

He the risk-profile now changes substantively, and that impacts the costs that an insurer anticipates it will absorb if an event takes place.

"That is the situation we are dealing with now," Alldredge says. "If we are going to have this type of revolving door of decisions, then why have the hurricane deductible at all?" he asks.

He notes that the issue first arose last year, when Hurricane Irene came ashore. "This is what spawned the controversy, in most cases, in the same states," he says.

The difference was that Irene was a hurricane and the NWS did not change the designation before it hit land.

Alldredge says many insurance companies were asked not to enforce the hurricane deductibles and some complied and others didn't.

But with Irene, Alldredge says, "It was a hurricane. In this case [Sandy], you have this phantom decision just before landfall that all of a sudden this was not a hurricane, even though it walked like a duck and quacked like a duck."