Hurricane Irma Quick Start Guide to the Insurance Claims Process
After hurricane Irma cleanup has been completed the insurance claim process begins. The first 30 to 60 days after a storm are crucial to protecting your insurance coverage for property damage and business interruption losses caused by the storm. We provide below the minimum steps that you should follow to ensure that you comply with the insurance claim process to maximize your insurance recovery. Well the steps generally outlined the claims process and reasonable strategies the specific requirements of your individual insurance policy will dictate your absolute obligations.
If you have never been involved with the insurance claims process then the world of windstorm insurance claims can be overwhelming. Just getting your life back together is enough. Jumping through all the hoops set up by the insurance claims industry to limit your ability to recover can be like taking on a second full-time job for the next year. We write this report to allow you to understand the process and prepare yourself. The simple way to take away a lot of the headaches is to consult and retain a law firm that concentrates its practice on the insurance claim process because they know the insurance company’s playbook and they can take the steps to present your claim in the best light that will provide you the best opportunity to obtain a full and fair recovery of your losses while you try to get your life back to normal.
Step 1: Photograph and document all damages.
Your smart phone is your friend. You have the ability to photograph, videotape and dictate notes right into your smart phone in the palm of your hand to document your losses in real time. We use apple and there’s a voice memo that is native to the phone that let you dictate your voice. There is also a speech recognition software that allows me to dictate rather than type. I can dictate more than 200 words per minute with minimal errors. Familiarize yourself with how these features work and use them to your advantage. Document all damage that you possibly can in store this data securely. Today you can upload photographs to a free dropbox account by signing up a dropbox.com. If you have original purchase documents for any items that are damaged this will provide a baseline of the cost of the item as well as a data purchase to allow the insurance company to determine the present money value. If you have the ability to scan these documents and uploading to the cloud also that is recommended. Photographs or video of the damaged items before the date of loss if available also could prove crucial to establish condition before the loss. This documentation of your losses in paper and through video and photograph is essential to showing the insurance company what you had and what remains as part of the insurance claim process when you prepare the proof of claim discussed below.
Step 2: Locate all insurance policies so that they may be analyzed.
Insurance policies are confusing complex documents that have clauses that have been the subject of one or more decisions of the court system that may limit or impact your ability to recover. A lawyer should be able to analyze the policy in light of the existing law to tell you your rights. The policy language often limits your rights and imposes obligations upon you to do certain things in a timely manner otherwise you may lose your rights under the policy. These duties are discussed below.
You may have multiple insurance policies that apply to a windstorm. Florida law requires residential property insurers to offer coverage for windstorms resulted from hurricanes well commercial not residential property insurers are not required to provide coverage for windstorm damage. All of your insurance policies need to be analyzed as soon as possible. An early consultation with an attorney is highly recommended.
Step 3: Provide prompt written notice to each and sure of your losses.
All insurance policies create a duty upon the insured as part of the insurance claims process to report losses as early as possible to the insurance company so that they may set up an insurance claim file and assign adjusters to estimate the losses from their perspective. The written notice should include your name, contact information, the location of the loss/damage, the date and time of the damage occurred and a brief description of the loss at minimum. A substantial delay in reporting the claim that prejudices the insurer’s rights can be the basis of a defense to payment under the terms of the policy. The insurance policy will typically use words like “prompt notice” or “notice as soon as practicable” and Florida courts have upheld these provisions whereby the insurance company can escape coverage where an insured fails to provide proper notice after discovering damage. Notice in writing is usually required by the insurance policy and your email or written communication with the company will be your proof that you put the insurance company on notice of your claim. Typically, you can call in your loss and the insurer will email you that the claim has been set up. This is enough to comply with the notice requirement under the policy. Please remember you need to call in your claim to each insurance company that may provide coverage to you. Putting only one company on notice of your claim or loss is not enough.
Step 4: Mitigate damages.
Typical insurance policies require the insured to “mitigate damages” after a loss which means that the insured should take reasonable steps to protect the insured property from further damage after the initial loss. This is fairly common sense and involves reasonable repairs and patches that the insured can make without putting themselves at risk given the circumstances after a loss. For instance, if you have a roof and several roof tiles of come off causing a roof leak then it probably is reasonable to place a tarp over the roof to prevent further water intrusion and damage to the interior of the home. If an insured fails to patch the roof or put a tarp over the roof if roof tarps are readily available then the insurer may not be responsible for the damages caused by the failure to mitigate damages. When in doubt, try to take reasonable steps without putting yourself at risk.
Step 5: Keep track of debris removal costs because they are likely covered under your insurance policy.
Typically debris removal costs are included under the coverage in a policy as a percentage of the total claim limit. Importantly, this may be a different coverage part and it may have a short reporting deadline that you need to understand. Some policies require you to report the costs of debris removal with a 90 or 180 days after the loss if you would like to be reimbursed. Failure to comply with the deadline means that you will not be paid for the costs that you incur.
Step 6: Understand the proof of loss deadlines.
There are deadlines for proof of loss statements that you need to understand and must comply with to have your losses covered under the policy.
Read and understand the proof of loss deadlines to ensure that you timely submit your claim documents to the insurance company. Some deadlines are short (120 days or less). You should consider asking your insurer now in writing for an extension of the deadline and preserve evidence of your request. Ask for an additional 180 days. Please understand that your deadline will not be extended unless you receive written confirmation of the extension from your insurer. Don’t be afraid to ask multiple times if you do not receive a prompt response from your insurer. You should plan to submit your claim by the original deadline if you were not granted an extension by the insurance company in order to preserve your rights to a recovery. Do not assume that your insurer will extend the deadline if it is advantageous to them to deny your request.
Step 7: Prepare a proof of loss statement.
The proof of loss statement is a document that identifies the property that was damaged and documents the losses incurred. If you did your homework in the steps above then most of the key evidence to establish your clan has already been gathered and is stored electronically or can be quickly scanned to PDF. Often the proof of loss will include items like before and after photographs, receipts, invoices, quotes for replacement cost and other records showing the value of the damaged property. Your insurance company should provide you with a form that they require you to use to present a proof of loss.
At our law firm we often times prepare a catalog of photographs, video and documents along with an Excel spreadsheet to document the losses incurred by our clients. We believe that this is the quickest and easiest way for the insurance company to analyze the losses and get our clients paid promptly. While you may not require this level of organization the more organized your proof of loss is prepared the easier it will be for the insurance company to analyze it and make you an offer to resolve the claim.
It is important that you keep a duplicate of all of the items that you submit to the insurance company and that you transmit everything to the insurance company with a cover letter or an email documenting when it was submitted. At our office every client has a file for each matter that we handle for them that contains all of the documents that we have obtained and all of the correspondence that comes in and goes out that we can look back on it anytime through keyword searches to find information. Inevitably, insurance companies lose or misplace information when they are deluged with thousands of claims like the ones that will result from hurricane Irma. It is incumbent upon the insured to follow up on the proof of loss and ensure the insurance company has received it and that they are processing your claim in order to be paid quickly.
Step 8: Understand your duties under the insurance policy.
The insurance company is entitled to conduct a reasonable investigation of the loss and the insured is required to cooperate under the “cooperation clause” of the insurance policy. Most insurance policies have a section entitled “Duties in the Event of Loss” that outlines the insured’s cooperation requirements like permitting the insurer to conduct and “examination under oath” where the insured has to testify, requiring the insured to provide certain documents and records and allowing the insurer to inspect the property upon reasonable notice. If you do not comply with the cooperation clause then the insurance company may deny your claim. Often times the insurance company retains lawyers to conduct these investigations in order to “protect their interests” which often times means trying to find a reason not to pay
a claim. A lawyer that is versed in the insurance claims process understands the tricks of the insurer and can protect your best interest.
Step 9: Understand your coverage for lost business income for commercial policies.
In addition to property damage losses after a windstorm businesses inevitably incur lost business income. Many business insurance policies include business interruption Insurance coverage designed to address these losses and compensate the business. This coverage is designed to cover lost income or profit caused by the inability to conduct the normal business activities due to physical or property damage. It is critical that every business owner understand their rights and duties under the policy and act immediately to ensure that their claims for loss of business income and other business interruption losses are paid in full by their insurers. All of the points above apply to business interruption insurance and the failure to comply with the requirements of the insurance policy may be a defense that deprives you of the money that you are otherwise entitled to and need during the period of time that your business operations are down.
Florida insureds should take the steps outlined above and consult and experienced insurance coverage attorney to help guide them through the insurance claims process. Businesses may also need to consider retaining an experienced accounting firm to help quantify and best present the losses to the insurance company. Quick action in the next 30 to 60 days should put you on the road to financial recovery caused by hurricane Irma.