Understanding Your Insurance Policy and How to Handle Claims
By Robert Fiorito, HUB International Northeast
Natural disasters can strike without warning. Sometimes, so fast that you don’t have the time to ask yourself if your business is prepared to handle it. Hurricane Sandy has left most of the East Coast brutally damaged, shaken, and under water. The severe damage from life threatening flooding, hurricane force winds and lengthy power outages has caused many businesses to shut down. As thousands of businesses and residences are recovering from the aftermath of this monster storm, they are also left to wonder what the next steps are in recovering their losses.
Understanding the proper coverage for your business is vital, yet many continue to underestimate the risks they may face. Contrary to popular belief, most property policies and homeowners’ insurance policies do not cover flood related losses, and flood coverage is available for virtually every business and homeowner. Your broker has the ability to custom tailor a solution to insure your home for the full value in the event of a storm or flood. The Federal Government offers federally backed flood insurance under the National Flood Insurance Program (NFIP) through the Federal Emergency Management Agency (FEMA) however these policies only offer up to $250,000 of building property coverage and up to $100,000 in personal property coverage. One should consider that purchasing additional flood coverage with a private insurer can add up to several million dollars of extra coverage to your NFIP base.
Generally, physical damage to your building or personal property “directly” caused by a flood is covered by your flood insurance policy.
The following is insured under the NFIP Building Property coverage:
- The insured building and its foundation
- The electrical and plumbing systems
- Central air conditioning equipment, furnaces, and water heaters
- Refrigerators, cooking stoves, and built-in appliances such as dishwashers
- Permanently installed carpeting over an unfinished floor
- Permanently installed paneling, wallboard, bookcases, and cabinets
- Window blinds
- Detached garages (up to 10 percent of Building Property coverage). Detached buildings (other than garages) require a separate Building Property policy
- Debris removal
The following is insured under the NFIP Personal Property coverage:
- Personal belongings such as clothing, furniture, and electronic equipment
- Portable and window air conditioners
- Portable microwave ovens and portable dishwashers
- Carpets not included in building coverage
- Clothes washers and dryers
- Food freezers and the food in them
- Certain valuable items such as original artwork and furs (up to $2,500)
The damages resulting from Hurricane Sandy have been estimated at $10 billion and are rising daily. Insurance companies will want to measure the reported damages extensively, whether they are flood related, wind related and so forth. Such investigation can cause the claim process to be especially time consuming.
Claimants are urged to make the initial call to the insurer as soon as possible. Hesitation will only delay the process as thousands of others are making the same call. Collect as much information about the damages as possible. Factors such as clear communication, a detailed description, before and after photographs, and provided estimates will only make the adjuster’s job easier and accelerate the process of your pay out.
Robert Fiorito, serves as Vice President, Hub International Northeast., where he specializes in providing insurance brokerage services to the restaurant industry. As a 20-year veteran and former restaurateur himself, Bob has worked with a wide array of restaurant and food service businesses, ranging from fast-food chains to upscale, “white tablecloth” dining establishments. For more information, please visit www.hubfiorito.com