By Phil Rarick, J.D.
1. Before You Clean Up Document Your Losses
Do not start clean up until you have documented your losses from Hurricane Irma. Use your cell phone to document your structural, equipment, and water damages with ample video and pictures. (Hopefully you also took pictures immediately prior to Irma.) Document everything, and then make a back up of those pictures/videos. Get a notebook and keep a log of all actions taken and all expenses, such as mitigation, clean up and professional fees. Of course, save all receipts.
2. Gather & Review All Insurance Policies
For damage to your home, the most obvious source of coverage is your residential property insurance policy. However, there may be other policies such as a separate flood insurance policy. In addition, you may have coverage under auto, boat, and marine policies. If you are faced with a potential claim from a third party, you may have a liability policy and an umbrella policy.
For business owners you need to review your commercial property policy. Flood loss is commonly excluded from residential policies but may be covered under your commercial policy.
If you do not have flood coverage, you still may have coverage under another policy where the covered cause contributes to the loss, such as wind, power outage, storm surge or other area wide causes.
3. Put Your Insurance Company on Written Notice
As soon as you have been able to assess the damages – and even if you have not been able to assess all the damages – put your insurance company on written notice by sending an email to the carrier. Even if you are not sure of coverage, put the company on notice. A notice is simply that: a notice that you may have a claim. There is no reason to delay. Make sure the notice is in writing – email is usually the best and fastest and sent to the agent required by your policy. At the top of your email put, “Please Confirm Receipt” and save all confirmations. In addition, most popular programs such as Outlook, allow you to get a “Delivery Receipt” and “Read Receipt”. Always try to get a confirmation of receipt.
Note: For water damage from Hurricane Irma be careful about the language you use to report it. Since many residential policies exclude damage from floods but do cover “wind-driven rain”, it may be best to contend that your house suffered “water damage” rather than state that “my house got flooded”. A professional adjuster can help assess whether the damage is caused by “wind-driven rain” or a flood. Never misrepresent your loss, but don’t help the insurance company by reaching premature conclusions that give them an excuse for denying coverage.
4. Demand An Insurance Adjuster Inspect Your Property ASAP!
Do not tolerate unreasonable delay by your insurance company. Yes, the insurance company representative may have a heavy case load following Hurricane Irma but you want to be near the front of the line. After you give notice, put the ball in the court of the insurance company: expect and demand that the company send an adjuster immediately to photograph your losses. If they fail to do so, document your requests via email. In the event the company acts in bad faith, proof of such delay will be critical to proving your case in court.
5. Assess Coverage for Business Interruption
If you have a small business, you may need to prove your lost profits for the time that the business was interrupted. Of course, the time frame for a hurricane such as Irma can begin well before Irma arrived, as most businesses had to close several days before the hurricane hit in order to give employees time to prepare. After the hurricane passed, there was down time for employees to return, since many evacuated out of state. Note: There are two main types of business interruption: one that covers for lost profits and one that covers contingent business interruption such as losses due to damage to customers or suppliers. The distinction between the two can raise complex issues. Your best answer to resolving these issues is a forensic accountant or public adjuster who specializes in assessing such revenue losses.
6. Mitigate Damages – Such as Mold
You can generally assume that you always have a duty to mitigate losses. If you have serious water damage, most policies require you to take prompt action to dry out the wet areas and will thereafter provide reimbursement for such costs. In South Florida, mold is a big issue. You may need to hire a professional mold remediation company that can do the clean-up and give you a warranty that the area will be free of mold for a period of time following the clean-up.
7. Hire Experienced Experts to Evaluate and Advocate
Remember the adjuster who reviews your loss is paid by your insurance company and your insurance company is in business to minimize loss. You may need to hire your own adjuster if the damages are significant to get a true, independent valuation. As mentioned, for business interruption, I strongly recommend securing the services of a CPA or public adjuster.
BIG WARNING: Be careful in signing an assignment of benefits to public adjusters or any remedial companies. Read the engagement agreement! If any questions, call your attorney.
1. Watch Out for Policy Deadlines: Calendar All Deadlines
If you miss a deadline in your policy, it could kill your claim. Therefore, after reviewing all your policies, calendar all deadlines, such as the deadline to file a proof of loss or file suit if you disagree with the insurance company. Also, it is good practice to put a “tickler” reminder on your calendar to advise you of upcoming deadlines.
2. Do Not Rely Upon Verbal Notice
If you report a loss by telephone, confirm that report with a follow-up email of your conversation with the insurance company representative. See Tip #3 above.
3. Do Not Disclose Information In Bulk
This caution applies to all claims, but is particularly important for business interruption claims. Be careful of requests from the insurance company for bulk downloads of your financial information. You should secure the advice of a professional adjuster to give the insurance company only relevant information to prove your claim.
4. Negotiate The First Offer: It May Be Low
You may get a good first offer – and you may not. Therefore, be prepared to negotiate your first offer. Insurance companies make profits by underpaying claims – not overpaying them.
5. Don’t Act Too Quickly To Release the Insurance Company
To close their case on your claims, insurance companies are going to want you to sign a release that will prevent you from having “settlor’s remorse” and asking for more payments at a later date. Beware of checks that state “Full and Final Settlement” because they mean exactly that: Full and Final. Prior to signing anything, or cashing any checks, it is advisable to first review the release – and the scope of that release – with your attorney.
How We Can Help
For over 20 years, we have helped small businesses in good times and bad – such as when big hurricanes like Irma strike and there is a need to resolve insurance claims. You pay for insurance for years to cover such times as these. It is time for your insurance company to step up – quickly. We are available to meet with you and assess your claims. Our initial consultation fee is $275. To schedule a consultation contact Christy at Rarick & Beskin, (305) 556-5209 or email me at firstname.lastname@example.org. We look forward to working with you.
The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston business and estate planning attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.