Insurance Claims for Hurricane Matthew Guided by Predecessor Superstorm Sandy
Hurricane Matthew that hit the southeastern United States in October 2016 was the deadliest hurricane in the Atlantic in 11 years, with a U.S. death toll of 49.
Along with a large loss of life for such a storm, it is estimated that more than $10.5 billion was lost in damages caused by Hurricane Matthew. This represents the largest amount of damage since Hurricane Sandy four years earlier in 2012.
Hurricane Matthew was responsible for widespread power outages, flooding in roadways and dams, and damaging many buildings in its path, from Florida to Virginia. As a result of the potential for devastation, mass evacuations and closures were ordered by civil authorities in the area.
With insurance executives on television newscasts assuring the public that their policies will help protect business owners, many people felt confident that their policies would cover any damage to the business without much trouble. However, for businesses still dealing with the aftermath of Superstorm Sandy fighting insurance companies, many lessons have been learned about commercial storm damage claims.
Business Insurance Coverage for Hurricane Matthew
Business owners who had insurance coverage prior to Hurricane Matthew likely assumed that they had the coverage necessary to protect them in the event of an all-to-common-hurricane affecting their businesses. This was the case for business owners who were affected by Superstorm Sandy as well.
Business owners whose businesses suffered damage from Hurricane Sandy found out the hard way that sub-limits and exclusions of their policy, as well as generally unclear policy provisions, caused a great deal of trouble for businesses as they fought their insurance companies for coverage of the catastrophic event.
Numerous hurricane damage lawsuits are currently making their way through the courts after a long battle that started shortly after Hurricane Sandy in 2012. Many of these storm damage lawsuits hinge on the specific terms used in the policies for insurance coverage and boiled down to the use of specific semantics related to the coverage.
It is expected that the same types of disputes and lawsuits will flood the courts as businesses continue to recover compensation for the damages caused by Hurricane Matthew.
Understanding Important Terms in Your Insurance Coverage
In particular, five particular terms in business insurance coverage are important to understand in the events of a natural disaster like Hurricane Matthew that may affect your business. These include sub-limits, coverage for business interruption, civil authority coverage, contingent business coverage and service interruption coverage.
Following Superstorm Sandy, many business owners were told that their insurance coverage was capped at a particular “flood” sub-limit, when in actuality, when carefully reviewing the terms of the policy coverage, it was determined that a different sub-limit applied—or no sub-limit at all.
Policies sometimes distinguished between coverage for “flood” versus those caused by a “storm surge” or “windstorm.” These distinctions had a great deal of influence when it came to insurance claim adjusters paying out (or not paying) claims to business owners.
With respect to those affected by Hurricane Sandy, business owners whose policy specified a “windstorm” typically received better coverage for their losses compared with those whose policies defined “flood” as including a “storm surge.” The terms used made a world of difference for some claimants.
Business Interruption Coverage
Business interruption coverage, also known as BI coverage, helps businesses recover losses resulting from unavoidable interruptions to their day-to-day business activities. The business can be interrupted from actual property damage or can be due to lack of power or other utilities as well as communication and Internet access.
Contingent Business Interruption Coverage
If business owners have not been directly forced to close their business, they may be able to seek benefits under contingent business interruption coverage. This type of coverage is typically triggered when businesses do not directly suffer from physical damage, but their income is still impacted and revenue lost after a major supplier of theirs suffers a loss.
Many policyholders are not aware that their small businesses are covered by a contingent business interruption and may seek benefits accordingly.
Civil Authority Coverage
For those businesses that did not suffer physical damage, many of them suffered from a loss of business income as a result of the storm. Some claimants may not be able to access reimbursement from business interruption coverage, but may be able to use their benefits under “civil authority.”
Civil authority refers to coverage protecting businesses when access to the business is prohibited. Access may be denied due to a city’s mayor or other authority who may close down particular areas, order evacuations or the like. Some individuals have had difficulty providing documentation of evacuation orders if they were issued by police departments versus orders issued by city or state officials.
Insurance policyholders may have to obtain affidavits from local law enforcement agencies that support the issuance of forced evacuations in a particular area.
Service Interruption Coverage
In some cases, a planned shutdown to conserve resources prior to a pending natural disaster may also be covered under service interruption coverage in an insurance policy.
With respect to Hurricane Sandy, some insurance companies challenged the coverage due under these terms in a property insurance policy. Claimants affected by Hurricane Matthew may face similar challenges as they attempt to receive compensation under their service interruption coverage benefits.
Seeking Assistance in Filing Hurricane Matthew Insurance Claims
Many business owners attempt to file claims on their own in order to receive compensation for their losses after major storm damage, but this can be a difficult task and is especially difficult when there is a lot of money at stake.
Business owners should consider hiring an attorney to help handle insurance claims related to Hurricane Matthew. Oftentimes, attorneys can help business owners settle the matter more quickly outside of court to resolve any relevant issues. Attorneys can help with thorough documentation for claims, negotiations with insurance companies and much more.
If you suffered damage from a storm such as a hurricane, you do not have to take on your insurance company alone. Get help from The Emma Law Firm today by filling out the form below!