Hurricanes Harvey and Irma are the most recent reminder of the havoc that storms can cause in coastal areas of the United States. The loss of life and the substantial property damage beggar description. Harvey and Irma’s devastation have multiplied for those affected, both individuals and businesses, who lack adequate insurance or even the correct insurance. As the Associated Press reports, roughly 80% of Houston homeowners do not have flood insurance. Given that much of Harvey’s damage will likely be found to have been at least partially caused by flood, this means that 80% of Houston area homeowners will not have insurance coverage for their houses and personal property.
Hurricane Irma has hit Florida hard, and moved up the coast towards Georgia and Alabama, and even beyond. Hurricane Jose hit the Caribbean, and Hurricane Katia made landfall in Mexico. Hurricane Maria is a category 5 hurricane which is now slamming the Caribbean. While Federal flood insurance will not be available for Maria (there is a 30-day waiting period between initial purchase and policy activation), it still makes sense for individuals and businesses to take the time to review their insurance coverage and prepare for the next storm. Valuable documents and insurance policies should be moved to a safe and dry location, or scanned and emailed to professionals or family members who live outside the area. Those slammed by Harvey and Irma will need to determine if they have appropriate coverage and may need assistance with their claims.
As with Hurricanes Katrina and Superstorm Sandy, numerous insurance issues will arise in the wake of Harvey and Irma. A primary issue will be whether loss was caused by “flood”. Just because a property is inundated with water does not mean the resulting loss was caused by “flood” as defined in the applicable policies. Under some policy language “flood” damage does not include storm surge, or back-up of sewers and drains. Other policies specifically include those perils in the definition of “flood”. Along the same lines, the Army Corp of Engineers released water from Houston area reservoirs and from behind dams in order to protect against even greater destruction if the dams failed. This may not be “flood” as it is man-made. In fact, it may create a cause of action against the U.S. government.
Other coverage issues include the availability and calculation of business interruption coverage. Policyholders should be aware that these coverage vary significantly from policy to policy and such claims should be prepared by professionals who are experienced in insurance matters. Not all accountants have the requisite experience. Ordinance and law coverage can pay the cost of repairing or rebuilding to current codes, but only if a policy covers the cause of loss itself. To the extent covered and excluded causes both contributed to the loss, it may be important for the policyholder to allocate between the causes.
After the loss, the policyholder should document the loss with photos and video. To the extent possible, the policyholder should give notice to their insurers immediately. The recovery will be difficult, but it will happen.
Offit Kurman’s Insurance Recovery Group has extensive experience with major storms and has successfully represented clients with Katrina claims, Sandy claims, and claims arising out of numerous other major weather events. We are already helping clients with Harvey and Irma claims. We help clients review their coverages before the storms hit to make sure they have the maximum available protection. We work with clients to present claims in the most favorable way after the storms. We have been very successful in achieving the most favorable results without litigation, as well as successfully litigating major property insurance and business interruption claims.
Please contact us here to have our insurance recovery group assist in Harvey and Irma claims. We are also available to review coverages and assist in disaster planning in advance of Maria and other storms.
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