Category: Flood Insurance

hurricane damage

Can Your Commercial Insurance Policy Stand Up To The Rest of the Hurricane Season?

It might be mid-September, but the hurricane season is far from over, and if weather forecasters are right, the rest of the season could be pretty brutal for businesses around the Gulf Coast. If your business maintains a commercial insurance policy, you might think you are well protected to weather the rest of the hurricane season, but this might not be the case. Nuances in your policy might actually leave you unprotected, so before the next hurricane hits, make sure your commercial insurance policy is up to the task.

Flood Damage vs. Water Damage

Just because you don’t have flood insurance doesn’t mean some or all hurricane damage isn’t covered by your business insurance policy. Whether your business is far inland from the coast or was in the direct path of the storm, damage should be covered under your policy unless explicitly stated otherwise. How the water enters your home or office can also matter when determining if water damage is covered. If wind uplifting the roof or broken roof fasteners caused water to enter the building, this type of damage would usually be covered. On the other hand, if rising water from storm surge or overflowing waterways entered the building, that might not be covered under most policies. If you’re unsure whether or not your damage is covered under your policy, talk to an experienced wind and hurricane damage attorney to understand your options.

Look Out For Special Deductibles

Sometimes insurance companies treat hurricanes different than other types of natural disasters. Deductibles for hurricane damage can be much larger than deductibles for other types of property damage. It’s important to determine if your deductible changes for “named storms,” and if so, by how much. You don’t want to end up with a deductible you can’t afford.

Consider Business Interruption Insurance

Hurricanes and severe wind won’t just damage your property; they’ll damage your income. Having a business interruption insurance policy can help you obtain compensation for lost income while you work to get your business up and running again.

Know Your Rights

After a natural disaster, insurance companies might try to mitigate payouts through bad faith insurance tactics and lowball settlement offers. The type of loss experienced after a hurricane can be stressful, but obtaining compensation shouldn’t be. If you think your insurance carrier isn’t acting in good faith or is minimizing your claim, talk to a hurricane damage lawyer to protect your rights.

Raizner Slania: Hurricane Damage Claims

If your commercial insurance carrier has denied, delayed, or disputed your business hurricane damage claim, an experienced insurance dispute attorney at Raizner Slania LLP can help. Call us today for a free consultation. We handle all bad faith insurance litigation cases on a contingency fee basis, meaning you will not pay us anything unless we help you recover compensation.

Types of Flood Insurance: What You Should Know

The heavy rains that pummeled areas of east Texas and caused significant flooding to areas around Houston and Dallas last month are expected to result in flood insurance claims that should break records. The flooding affected thousands of homes, vehicles and businesses, which means the potential for thousands of claims throughout more than 20 Texas counties.

Some of the worst damage, and the largest number of claims, will be to homeowners, with hundreds of homes reportedly lifted off their foundations and destroyed and thousands of others being severely damaged by flood waters, and thousands of cars being destroyed in the floods. Unfortunately, because of the numerous limitations put on homeowners’ flood insurance policies, there is only so much one can do in order to protect someone who is relying on a government-backed flood insurance policy.

Homeowners Flood Insurance

Most homeowners flood insurance is offered by private insurance through what is called the WYO, or write-your-own, programs that were set up through FEMA in the 1980s. This was done to transfer management of the National Flood Insurance Program (NFIP) policies and claims to private insurance, to save on FEMA’s agency overhead and to spread the work around a little bit, and perhaps pay claims a little faster. This type of arrangement is very lucrative for the private insurers because they get to collect costs and fees and administer claims, while FEMA gets to pay. Unfortunately, while FEMA saves money and the private insurance companies make out pretty well, the homeowner is left with coverage that is quite limited, but not nearly as limited as their recourse should they not be happy with any part of the process.

Because of the limitations, we typically don’t handle standard homeowners flood insurance policies, although we can handle some higher-end policies. If a homeowner has a dispute over a flood insurance policy, the dispute must be filed in federal court, and it is extremely rare for federal courts to allow recovery for many types of claims, including bad faith. In fact, the law generally doesn’t allow for the recovery of bad faith damages and attorneys’ fees in a dispute over a flood insurance payment.

Commercial Flood Insurance

While we typically don’t handle claims for most individual homeowners, we can and do handle problems people have with flood insurance on multi-family properties, such as apartment and condominium buildings. If you own a building with more than five apartments or condos and your claim is not handled properly by the insurance adjuster, or you believe someone has acted in bad faith somewhere along the line, we can probably help you.

Also hard hit by the flooding were churches and synagogues. Often, making a claim can take a long time, and a church that has been working on a tight budget based on the amount they get in the collection basket every week can often feel pressured by the time it takes to process claims. When a flood causes serious damage to a church, all the congregation cares about is getting the doors open again, which can often mean approaching the insurance claims process in the most efficient and effective way possible and making informed decisions about the future of their church. We can help with that.

Also hard hit were businesses throughout Texas, which means there will be a lot of attention paid to commercial flood insurance policies. Besides some commercial buildings that are total losses, there are also numerous reports of damage to parking garages and the lower levels of all sorts of commercial properties, including office buildings, shopping malls and strip centers. According to some reports, the Texas Medical Center was extremely hard hit, and saw extensive damage to many of its research labs.

Most commercial flood insurance policies are also handled through the NFIP and those have some of the same types of restrictions as homeowners’ policies, but many businesses also carry excess flood insurance, which covers losses above the federal limit, as well as losses for such expenses as lost income and business interruption costs, which are not covered by the NFIP. Carrying excess flood insurance is a wise idea, but it also adds several other aspects to the claims process, and a business owner should make sure they’re making informed decisions and following all processes accurately. Excess flood insurance policies are often a lifeline for businesses hit by a natural disaster, and that is why we do handle excess flood insurance claims when the insurer fails to honor its agreement.

These types of scenarios are being duplicated all over the eastern half of the state, which means it’s going to be a long, hot summer for those who handle flood insurance claims. It also means a lot of headaches for people who suffered losses during the flooding and who try to collect on claims. Because most Texas insurance companies no longer underwrite flood insurance, most of the claims are handled by FEMA, which means following very strict federal regulations and guidelines when filing claims, lest they miss out on collecting for their claims.

FEMA Extends Proof of Loss Filing Deadline

Officials with the Federal Emergency Management Agency (FEMA) last week announced that they would give Texas and Oklahoma flood victims extra time to file their Proof of Loss statements to the agency.

Last Thursday, FEMA gave flood insurance policyholders operating under the National Flood Insurance Program an additional 180 days to file, over and above the normal 60-day filing deadline, extending the period of eligibility to January of next year (2016). This increase gives Texas flood victims the time they need to have the damage to their property assessed, so that they can make as accurate a claim as possible.

What is a Proof of Loss?

For those who are unfamiliar, a Proof of Loss is a signed and sworn statement by the policyholder of the amount of money they are requesting from the Flood Insurance Program, and it is accompanied by documentation to support that amount. FEMA is very careful to point out that the Proof of Loss is not the claim itself; the claim is the declaration by the policyholder that they are entitled to payment under their flood insurance policy. It is possible for a policyholder to file several Proof of Loss claim forms, but they are only entitled to be paid for one claim per event. In this case, the “event” is what FEMA has described as “torrential rains beginning May 16.”

Under the terms of the National Flood Insurance Program (NFIP), the complete Proof of Loss must include documentation of every element of the loss, must be signed and sworn to by the policyholder, and must be received by the NFIP servicing agent or the company who wrote the policy within 60 days of the flooding event. With regard to the current Texas flooding, that deadline has now been extended to 240 days. Insurance adjusters are supposed to make the Proof of Loss form available to the policyholder, but that is done purely as a courtesy; the policyholder is ultimately responsible for making sure the Proof of Loss is filed in a timely manner. As previously discussed, dealing with wind insurance and flood insurance after these storms will be challenging.

Even with the extension, there are bound to be a lot of disappointed victims of these Texas storms. According to FEMA, there are approximately 603,000 National Flood Insurance Program policies in effect in Texas, which covers only a fraction of the 7.3 million households in the state.

Contact an Experienced Flood Insurance Lawyer

The trial attorneys of Raizner Slania have handled all types of insurance claims against every major insurance company. As your fellow Texans, we look forward to helping you recover as best we can. Please contact us to discuss your excess flood insurance, or commercial or multi-family property flood claim delays, denials, or underpayments, and any other insurance issues we can help with.

Houston Flood

Dealing with Wind Insurance and Flood Insurance After the Texas Floods

One thing is for sure; while the recent rains and terrible flooding that have hit much of East Texas and parts of Oklahoma are trying times for us all, the most trying part of this may still be ahead, as we deal with our insurance carriers to be reimbursed for the damage. Unfortunately, homeowners and businesses commonly see their claims for wind or flood damage delayed, if not outright denied. And even if neither of those happens, the flood insurance company will often try to lowball them after a natural disaster, such as the one we just experienced.

In most cases, homeowners’ insurance policies will cover damage from windstorms, hurricanes and hail. Many will cover what they call “sudden and accidental water damage,” which usually refers to what happens with plumbing accidents, but few homeowners’ insurance or business property insurance policies will cover flooding of any kind, especially rising water or the effects of storm surge. It’s important that everyone with such a policy is fully aware of this.

For those who live in coastal areas, insurance companies began to refuse to write insurance policies for wind events that caused water damage, especially hurricanes, and instead created the Texas Windstorm Insurance Association (TWIA) to provide coverage for wind driven rain, or for water that enters through a damaged roof, window or wall.

Flood Insurance Policies May Not Help You Enough

Flood insurance policies are much more limited, in part because they are all underwritten by FEMA’s National Flood Insurance Program (NFIP), even if private insurers sell and manage this type of policy. This coverage is limited to just flooding, regardless of the impression your insurance carrier gives you. While the flood and wind damage may be administered by a private insurer with a single adjuster evaluating damage from both, because the flood insurance is underwritten using federal money, policyholder rights are more limited. If you have a dispute over a flood insurance policy, it must be filed in federal court, and they rarely permit recovery for some types of damages, including bad faith.

This can be a big problem if the private insurance company decides to push as much damage as possible into the flood damage category, which they often try to do in order to get FEMA to pay as much of the claim as possible. For one thing, it means the policyholder has fewer rights, but it also can mean a much smaller payment; in fact, if the policyholder has no flood coverage, it can mean no payment at all. Sometimes, a private insurer will rely on a policy’s concurrent causation clause to avoid having to pay anything.

Under those circumstances, Texas policyholders would then have to prove, usually through the use of engineer opinions, which portion of the loss is from flood and which portion is from wind. If it’s possible to prove misconduct on the part of the insurance company, different policyholders have different rights. In the case of a standard property policy, which again will not include flood insurance, the insured may bring an action for a number of things, including violations of the Texas insurance code, common law bad faith, fraud, breach of contract and other remedies, and they may recover actual damages, treble damages, attorneys’ fees, punitive damages, and things like that. However, if there is misconduct in the handling of a flood claim, the policyholder has no recourse on that end; all they can recover is the damage they can prove.

There are some things people can do to protect themselves in any case, however, to give them a better chance of recovering from any kind of weather event:

  • Take clear photographs of the damage before it has been repaired, even if the repair is only temporary, because your photos can help experts distinguish between wind and water damage.
  • Make a list of all of your damaged items and make a note of exactly where they were located within the building.  Items on the floor, for example, may be covered by flood while items high on walls or on higher floors may be covered by a wind policy.
  • Work closely with the insurance company’s adjusters to show them your property so that they can better distinguish between flood and wind damage and loss.
  • If you have a flood policy, be sure to file a proof of loss within the required time frame, which is usually 60 days from the date of the loss.
  • If unsure, put both your property insurer and your flood insurer on notice of the loss right away, without delay.
  • Take appropriate and reasonable steps to complete temporary repairs, mitigate damage and prevent further loss.
  • Communicate regularly and openly with your insurer.  If you are dissatisfied with the timeliness, professionalism, opinions or payment from your insurer, let them know in writing as soon as possible.
  • If the insurer is disputing your loss, be prepared to retain your own professional team to fully document the loss, including your own contractor, public adjuster or attorney evaluate the damage and distinguish between flood and wind damage, if need be.