Year after year, hurricane season ravages coastal areas. Texas is no stranger to these intense storms, which can significantly impact commercial property owners who will have to deal with not only the costs associated with rebuilding but also what it costs to pay regular business expenses while the property isn’t operational. Knowing just how much damage hurricanes cause to Texas commercial properties can help owners obtain the right amount of insurance coverage against these storms that can threaten their livelihoods.
Texas Commercial Property Hurricane Damage
Hurricanes and the damage they cause are unfortunate realities many business owners face each year across the nation. Economic losses from hurricane winds and storm-related flooding can average in the billions. Many Texas business owners saw this firsthand in 2017 with Hurricane Harvey. As much as 27 percent of Houston’s commercial real estate was impacted by flooding in the wake of the massive storm. The roughly 12,000 affected properties had a combined value of $55 billion and included 167,218 apartments, 73 million square feet of retail space, 60 million square feet of office space, and 11 hospitals.
As of 2019, Texas was ranked second in the nation just behind Louisiana for business losses due to destructive weather. Tornadoes were deemed the costliest natural disasters of median losses per business, followed closely by hurricanes. With this in mind, it’s clear that Texas businesses are at risk for property damage and even total destruction during hurricane season.
Causes of Hurricane Damage
Strong, high wind activity
Hurricane-strength winds can cause an incredible amount of damage. According to the Saffir-Simpson Hurricane Wind Scale, hurricanes rated a Category 3 and higher are known as major hurricanes that can cause devastating to catastrophic wind damage and significant loss of life simply due to their strength.
Storm surge
Storm surge refers to the rise in water above ordinary high tide. A hurricane’s high winds can push this water up onto the coast, resulting in flooding in immediate areas.
Heavy rainfall and flooding
Another source of harm to commercial properties during a hurricane is heavy rainfall. Hurricane rains can drop around six inches of rain per hour; however, slower-moving storms can linger and drop additional considerable amounts of rain that can quickly inundate areas with water.
Why Hurricane Claims Can Be Costly for Business Owners
While most business owners have some form of insurance to protect their operations from a variety of liabilities, commercial property insurance is necessary to protect the property from unforeseen losses. However, even if owners have a valid claim for hurricane losses and have also obtained comprehensive wind and flood coverage, what they recover after filing a claim can be limited by policy language, policy exceptions, and/or issues with an insurance provider. Not only that, but the extent of losses a business sustained as the result of a hurricane depends on a variety of factors, including:
Business Location
Coastal cities are typically more prone to damage from certain natural disasters, including hurricanes and tropical storms. Because these areas are so susceptible to property damage based on their location alone, coverage costs are higher, and purchasing additional coverage may also be necessary to protect against flooding and wind damage.
Property Scale and Structure
The larger the property, the more business owners stand to lose in the event of a hurricane. The age and design of the owners’ buildings can also affect the length of time and amount of money it will take to ensure and repair them. Flooding, for instance, can result in foundational damage and can weaken the entire structure of a building. Multi-level properties may need extensive repairs on certain levels but not others. Property damage caused by hurricanes and other storms could also result in cosmetic damage issues that may not be covered by an insured’s policy.
Business Industry
The type of business a commercial property owner runs can also affect potential losses due to a hurricane. Farms, ranches, and various enterprises that rely on the outdoors are at a greater risk of income loss due to flooded fields and/or lost livestock. On the other hand, businesses along the coast that rely on heavy machinery could also deal with water intrusion damage in the event of a hurricane.
Documentation
Insurers generally require a good amount of documentation, including paperwork, photos, and videos detailing the damage sustained as the result of a hurricane. Owners should inspect their property both before and after a storm, ensure their records are up to date and have itemized lists of their assets and holdings. In doing this, they are more likely to receive a fair and timely claim payment.
Insurance Coverage Attorneys
Hurricanes can cause a great deal of damage to business property protected by commercial property insurance policies. Despite having the proper coverage in place, however, insurance companies can decide to take advantage of their policyholders in their time of need by wrongly delaying, grossly underpaying, or denying rightfully filed insurance claims.
At Raizner Slania, our insurance coverage attorneys have successfully handled thousands of insurance claim disputes against some of the largest insurance providers in the world. If your business needs assistance with a commercial property claim due to hurricane damage, we can help. Contact us today to get more information on how we can assist with your claim.
