By Sam Russell
Hurricane Irma struck Florida on September 10, 2017, and cut an unprecedented swath of destruction across the state. Fifty people lost their lives in this storm, which will have caused an estimated $50 – $100 billion in damage by the time the dust settles, doubling the record damage of Hurricane Andrew.
Within a week of Irma’s arrival in Florida, individual Floridians and Florida businesses had filed over 300,000 insurance claims, and industry insiders say that this is the tip of the iceberg. The process of settling these claims has been slow, with fewer than 5% being settled immediately.
Without delay, Florida’s small business owners and homeowners should review their insurance policies, notify their insurers of their losses, and thoroughly document their losses. The following is a practical, step-by-step primer to follow when making an insurance claim in the wake of Hurricane Irma:
1. Understand your coverage. Gather all of your insurance policies and read them, cover-to-cover. Your insurance broker will have a copy of your policies if you can’t find them, as will the insurance companies themselves. Before analyzing every provision, you should first carefully read the “declarations” page, the notice requirements, and the exclusions. The “dec. page,” as it’s commonly called, will be at the front of the policy and contain the basic contours of your coverage, including the deductible and policy limits. The “notice” provision will probably be in the middle of the boilerplate terms, and will provide in detail the information that you must provide to the insurer – and, crucially, the amount of time you have to provide it – or you run the risk of your claim being denied. The exclusions will likely be found at the end of your policy, and will carve out exceptions to your coverage (for example, you may find an exclusion for flood damage or mold). If you have any doubt about whether any part of your damages are covered, you should make a claim anyway, within the notice period, and sort it out later.
2. Calendar your deadline(s). Insurers often deny claims because policyholders provide notice of loss too late. Do not let this happen to you. Determine the date that you first sustained a loss (probably September 10, 11, or 12), add the number of days provided in the notice provision, subtract five days to be safe, and add this date to every calendar you have. Tie a ribbon around your finger if you have to. Do not miss this deadline. If the notice provision does not provide a number of days (instead requiring you to provide “immediate” notice or notice as soon as possible/practicable), provide notice as soon as you can. The longer you delay, the weaker your claim will be. The policy will likely also require that you provide a sworn proof of loss within a fixed number of days of the hurricane. Do not miss this deadline, either.
3. Mitigate your losses, if appropriate. It is likely that your policy(ies) will require you to take steps to limit your losses. Oftentimes you may recoup the costs incurred mitigating losses from the insurer. If you do not do this, the insurer will likely argue that a portion of your losses are not covered because you failed to mitigate them.
4. Prepare your proof of loss. Your insurance policy(ies) will tell you what proof of loss you must submit, and when you must submit it. While these requirements may vary among insurers and among types of coverage, it is generally safe to assume that “more is more” when supplying evidence for your claims. For physical damage to your home or business, take as many pictures as possible, and save all receipts for expenses incurred mitigating losses. For business interruption or supply line interruption claims, you will likely have to submit detailed financial records to establish the amount of profits that you lost attributable to the Irma-related closure of your business or the loss of your supply lines, and the insurer may hire its own forensic accountant to inspect your books. If your business interruption losses are large enough, it may make sense to retain your own accountant to help present your claim and discuss the claim with your insurer’s accountant.
5. Don’t take “no” for an answer. Insurance companies may be particularly aggressive in their coverage positions owing to the magnitude of this loss. If your insurer denies your claim, or only provides a fraction of the coverage that you believe you are entitled to under your policy, do not accept this result lying down. Florida law provides powerful tools to policyholders seeking to enforce their insurance policies against stubborn insurers.
6. Don’t go it alone. If all goes smoothly, you will likely never need to talk to an attorney or an accountant to help you with your claim. But if you have any difficulty wading through the requirements in your policy or presenting your claim, consider engaging experienced insurance coverage counsel. If the insurer denies your claim or offers to pay you nickels on the dollar, engage coverage counsel to level the playing field. Insurance companies accept premium payments for years in exchange for the promise to be there on rainy days. Now that the rain has come, hold them to this promise.
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Note: The foregoing post contains general observations applicable to many insurance policies; this is not legal advice tailored to any particular legal issue. This should not be construed as legal advice, nor does the reading of this column create an attorney-client relationship between the reader and the Firm, or any attorney(s) at the Firm. If you need legal advice in analyzing your insurance coverage, presenting a claim, or disputing the denial of coverage, contact a licensed attorney as soon as possible. The Russell Firm will provide a free consultation.
Tel.: (904) 999 – “My R.A.” (904.999.6972)