Hurricane Insurance Litigation
What You Should Know About Filing Damage Claims
People who want to make insurance claims must do the following:
- Give prompt notice of loss to your insurance company. You can do this by phone, in writing, or in person. And keep a record of all communications with your insurer.
- Show proof of property ownership and damage and be able to document what you lost and what it was worth.
5 Things Your Insurance Company May Not Tell You
- If you need to stay at a hotel and / or buy food because your home is not fit to live in due to the hurricane, your insurer should reimburse you.
- Removal of trees and other debris may be paid for by your insurer.
- If someone else’s tree did damage to your home or property, your insurance should cover the cost of repair.
- Damage to your car should be covered by your auto insurance.
- If you replace any damaged property – such as your TV, computer, DVD player, etc. – your insurer should pay for the full cost of replacement.
What To Do After A Hurricane
- Report your loss promptly to your agent or the insurance company.
- Take pictures of the damage to the home and to its contents.
- Start making a list of items that were in your home that cannot be found or were destroyed.
- Keep all receipts for hurricane related expenses.
- Find your Homeowner’s Insurance Policy or request a copy from your agent or insurance company.
- Keep written records of any contact with your insurance company, the adjuster or the agent.
- Save all paperwork you receive from your insurance company, the adjuster or the agent.
- Return home only after the authorities advise you that it is safe to do so.
Other Helpful Hints For Recovering After A Hurricane
- Avoid loose or dangling power lines and report them immediately to the Power Company, police, or fire department.
- Enter your home with caution. Beware of snakes, insects, and animals driven to higher ground by flood water.
- Open windows and doors to ventilate and dry your home.
- Check refrigerated foods for spoilage.
- Drive only if absolutely necessary and avoid flooded roads and washed-out bridges.
- Use telephone only for emergency calls.
- If you smell gas or hear a hissing noise, open a window, quickly leave and call the gas company.
- If you see sparks or broken or frayed wires turn off the electricity at the main breaker.
- If you have to step in water to get to the fuse box or circuit breaker, call an electrician first.
- Check for sewage and water line damage. If you suspect damage avoid using the toilets and call a plumber.
- If water pipes are damaged, contact the water company and avoid the water from the tap.
- Boil water before using or obtain safe water by melting existing ice cubes.
Q: Should I begin repairing damages myself, or should I wait for the adjuster first?
A: Make whatever temporary repairs you can. Cover broken windows, damaged roofs and walls to prevent further destruction. Also save the receipts for supplies and materials you buy to give copies to your insurance company. It will reimburse you for reasonable expenses.
Q: What should I do next?
A: Get a detailed estimate for permanent repairs to your home from a reliable contractor and give it to the adjuster. The estimate should contain the proposed repairs, repair costs and replacement prices.
Q: What proof do I need to replace my normal household goods, such as TV’s, DVD and furniture?
A: As for ordinary business items like furniture and fixtures there is coverage but it will go easier if you have receipts or proof of what you had before the hurricane. You likely won’t get an argument if you say you had a few computers or types of machinery, but if you try to claim that you just had your entire store redone last month with top-of-the-line fixtures, be prepared to provide receipts or documentation from your suppliers.
Q: How do I get reimbursed for items like jewelry, artwork, furs and antiques?
A: Problems can arise when the claim is for unusual items like jewelry, artwork, furs, and antiques without receipts or documentation. You should have separate insurance riders for expensive items, and appraisals for unique or valuable items such as works of art. Receipts and appraisal documentation belong in your safe deposit box.
Q: Does the contractor who fixes my home need workers’ compensation insurance?
A: Yes. If a worker is injured on your property you may be liable for his injuries if the contractor doesn’t have workers’ compensation insurance.
Q: The public adjuster who I hired to adjust my claim because I thought the insurance estimate was too low asked me for money up front. Can he do that?
A: No. There was an order issued after the hurricane that no up front money may be charged and the cap on adjusting fees is 10% of the total recovery.
Q: My mortgage company never paid my homeowners’ insurance and now I don’t have coverage. What do I do?
A: Under a new law the mortgage company is responsible for any damage to your property that would have been covered by your insurance. Also, all costs and fees to reinstate the insurance have to be paid by the mortgage company if the insurer sent notice of the payment due.
Q: How much insurance coverage should I have?
A: If you live anywhere near water you should consider obtaining flood coverage (even if you are not required to carry it). Know that you can obtain “excess” flood coverage beyond the $250,000 primary flood policy often sold by insurance agents. You should carry enough flood coverage and enough windstorm coverage to rebuild your home in the event either peril alone causes its destruction. So, for example, if rebuild costs (not market value, but cost of rebuild under the new codes) would be $275,000, you should carry at least $275,000 in flood coverage and $275,000 in wind coverage.
What Does My Homeowners’ Insurance Cover?
Homeowners’ Insurance can be different for every home but the basic coverage’s are:
- Coverage A – Dwelling (Home)
- Coverage B – Other Structures (Garage, Pool Screen)
- Coverage C – Personal Property (Furniture, Clothes, Electronics)
- Coverage D – Alternative Living Expenses / Loss of Use (Living Elsewhere While Home is Fixed)
While each insurer calculates the coverage’s differently the value of the house itself is usually 80%-90% of the appraised market value. The “Other Structures” is usually 10%-20% of the house value. The “Personal Property” value is usually 40%-60% of the house value and the “Alternative Living Expense / Loss of Use” is 10%-20% of the house value.
For example, if the appraised market value for the house is $100,000, then the dwelling coverage is $80,000 to $90,000 to fix or replace the home. The Other Structures coverage would be between $8,000 to $18,000 to repair a detached garage, pool screen, or shed. Personal Property coverage would be between $32,000 to $54,000 for belongings inside the home or in the other structures. Alternative Living Expenses / Loss of Use coverage would be $8,000 to $18,000. These amounts are the maximum that would be paid by the insurance company for your loss.
If your home is damaged or destroyed and the damage is covered under your homeowner’s insurance, you may have to live elsewhere while your home is being repaired. In that case, you’re likely to incur additional living expenses. If you’re renting out a room in your house and sustain insured damages to your home, additional-living-expense coverage often pays for the loss of rental income. However, this coverage is limited to the reasonable amount of time it would take for the residence premises to be repaired or, if relocating, a reasonable amount of time for the insured to become settled at a new location. This portion of the loss of use coverage is generally referred to as additional living expense or ALE.
In order for there to be coverage for additional living expense, there must be a covered loss to the residence premises which causes it to be uninhabitable. As such, coverage related to additional living expense is generally very straightforward when attempting to determine its applicability. Therefore, there has been very little in the way of litigation which is directly related to additional living expense coverage. In other words, if there is coverage for building damage, there is generally going to be coverage for a claim related to additional living expense related to that particular loss for a reasonable amount of time. On the other hand, if coverage is denied for the building claim, there will generally be no additional living expense coverage.
You may also consider purchasing additional coverage for traditionally non-covered items such as fences.
Hurricane Insurance Basics
Homeowners’, mobile homeowners’ and renters’ insurance usually covers the following: wind damage; rain damage that is a result of rain entering through a wind-damaged area; theft; vandalism and fire. If these damages occur, the insurance pays for emergency repairs to prevent further damage; additional living expenses; debris removal; actual cash value or replacement value of the damaged property, depending on the policy.
Flood insurance is sold separately, but usually in conjunction with homeowners’, mobile homeowners’ and renters’ insurance. It covers damage by these types of water: waves; tidal action; overflowing rivers, creeks or lakes; and groundwater runoff. Also covered by flood insurance are repair or replacement of damaged or destroyed buildings; compensation for damaged or destroyed personal property at its actual cash value; and debris removal.
Cars damaged by hurricanes are usually covered by the comprehensive section of an auto insurance policy.