
Hurricanes and tropical storms are among the most destructive natural disasters. These weather events can bring in swaths of heavy rain and powerful winds, often resulting in catastrophic flooding and wind damage. As these storms continue to grow in size and strength each hurricane season, it’s particularly important that Texas commercial property owners know the best means for filing a catastrophic hurricane damage insurance claim before disaster strikes.
Insurance Claims Tips for Catastrophic Hurricanes
Many people across the nation know how destructive hurricanes can be. These massive storms can cause catastrophic damage to coastlines and communities even several hundred miles inland. Hurricanes can produce winds exceeding 155 miles an hour, which can also spawn tornadoes. This often propels debris, breaking windows and doors and allowing rain and rising water to enter properties.
According to the National Oceanic and Atmospheric Administration’s Office for Coastal Management, from 1980 to 2023, weather and climate disasters in the U.S. have reached a combined total of $2.6 trillion in damage costs. Of those 363 disasters, hurricanes have caused the most damage, with over $1.3 trillion directly attributed to these events. With these losses in mind, business owners – particularly those along coastal regions need to know how to prepare themselves for potential damage when a hurricane is predicted, as well as how they can ensure they properly file a damage claim with their insurance provider.
What to do Before Filing a Claim
Before a hurricane is predicted, policyholders should plan for a worst-case scenario. For instance, if it has been more than a year since a commercial property policy has been reviewed or updated, insureds could find their policy limits are much lower than the business is worth. Not only that, but seemingly insignificant items can add up quickly and should be submitted for review and consideration. Hiring a property inspector to review the property ahead of time can save business owners in the long run if a hurricane strikes. This is particularly true if the property owner takes the time to adjust their policy to cover a large loss or total loss of the property.
Commercial property policies aren’t the only insurance coverage that should be reviewed before a catastrophic hurricane. Reviewing an umbrella policy for the business to determine triggers for business interruption and extra expense coverage can ensure policyholders have all their bases covered ahead of time.
Hurricane Damage, Flood Insurance, and Windstorm Coverage
Flooding caused by hurricanes can persist for weeks after the initial impact of a storm. Contrary to popular belief, commercial property insurance policies often exclude or severely limit coverage for flooding. Because of this, property owners should ensure they have a flood damage policy in place through the National Flood Insurance Program (NFIP) or a private insurer to recover costs for damage due to flooding. Catastrophic wind damage may also not be covered by a commercial property policy either. Commercial property owners should ensure they have windstorm coverage or a separate windstorm policy to cover any damage caused by hurricane-force winds.
What to do After Hurricane Related Damage Occurs
Following a catastrophic hurricane, business owners must assess the damage in and outside of the building thoroughly—documenting everything through pictures and videos. Owners should be prepared to provide an accurate description of the amount and type of damage sustained. Following this, the insurance carrier should be notified of the damage as soon as possible. This is especially important for disasters like hurricanes as they can impact hundreds if not thousands of people in a single area. The faster a claim is filed, the more quickly a commercial policyholder can potentially resolve it.
Once an insurance company has been notified, the policyholder should begin to document all losses and property conditions. This includes making spreadsheets of any lost inventory, along with photos and videos of all damaged items within the building, as well as collecting receipts and purchase orders for all items the business purchased that may be damaged. Maintaining these documents can help strengthen the insurance claim and help with the presentation of loss to the insurer and adjusters.
Once the damage has been well documented, commercial property owners should take steps to minimize further damage by making temporary repairs. This is usually a condition of a commercial property policy itself, as further property damage caused by a failure to mitigate the initial damage can result in claim denial. Temporary repairs can include putting a tarp over a damaged roof or closing off damaged areas from other portions of the property that may not be damaged or suffered minimal damage.
Lastly, commercial policyholders should consider obtaining legal counsel. Even before a hurricane strikes, an insurance coverage attorney can review all property damage policies with the insured to ensure there are no coverage gaps or lapses that could hinder a claim. Additionally, unfair denials, delays, and gross underpayments are unfortunately common problems for commercial policyholders dealing with damage to their businesses. Many policyholders may be unaware of the legal options available to them to fight against insurance companies that act in bad faith. If an insurer is refusing, delaying, or underpaying your property damage claim, it may be necessary to hire an insurance coverage attorney.
The Hurricane Zone and Property Insurance Coverage
The location of a business or commercial property is essential for business owners. Where the property is located can help a business define the clientele it is looking to attract, the industries it serves, as well as its proximity to other businesses that could increase foot traffic or build client relationships. For businesses in coastal areas, however, the location of the property can also have an impact on insurance coverage, particularly when it comes to covering damage sustained during a hurricane. The area most susceptible to hurricanes is known as the hurricane zone.
In the U.S., the hurricane zone includes areas such as the Caribbean, the Gulf of Mexico, and beaches along the Eastern coastline during the summer and fall months, which comprise the Atlantic hurricane season, as well as the Hawaiian Islands. According to the National Oceanic and Atmospheric Research Administration (NOAA), in 2016, the U.S. was ranked fifth among the top 10 countries with the most hurricane activity since 1970.
While the hurricane zone primarily indicates the areas that see the most hurricane activity, it also indicates the area where owning property may have a higher cost for insuring the property. The hurricane zone has an impact on policies that cover for hurricane damage in the following ways:
- Flood Insurance: If a business is located in a hurricane zone or high-risk flood area, and the property owner has a mortgage from a federally regulated or insured lender, they are required to obtain flood insurance coverage. Additionally, commercial flood insurance premiums increase when a property is located in a hurricane zone or an area with moderate to high flood activity.
- Windstorm Insurance: In coastal areas located within the hurricane zone, coverage for hurricane wind-related damage is generally not covered under a general property policy. Rather, windstorm insurance must also be purchased to adequately cover any wind-related damage. In addition, properties located in the hurricane zone or high-risk areas of windstorm damage are likely to see higher deductibles. This ultimately depends on the location of the property and the year it was built, its construction type, and the condition of its roof. Insurance rates within the hurricane zone are often among the highest in the nation.
Commercial Property Insurance Claim Attorneys
Victims of hurricane damage may face challenges with their insurers when starting the rebuilding process. When insurance companies wrongfully delay, grossly underpay, or deny legitimate insurance claims, they must be held accountable for their actions.
At Raizner Slania, our insurance coverage attorneys have successfully handled thousands of insurance claim disputes against some of the largest insurance companies in the world. If you need assistance with a commercial property policy or a hurricane damage claim, we can help.