If you are like most people in the Northeast, you experienced wind, rain and flooding right out of a disaster movie. Now that the storm has passed, it’s time to begin to look at the next stage of recovery and the most important document you should be reviewing is your insurance policy. Commercial landlords and tenants spend a great deal of time and money obtaining property insurance coverage for their businesses. However, not everyone knows the intricacies of insurance coverage following a natural disaster, nor do they have a full understanding of their rights to recover their losses.
Following are some quick tips for dealing with insurance issues:
- Review Your Policy. Before you do anything else, make sure you have a complete, current copy of your policy(s) and review them to get an understanding of what insurance coverage you have. For example, what are the policy limits? Are their endorsements pertaining to a “hurricane” loss? What are your deductible limits?
- Review and Categorize Your Loss. The differences in loss and coverage for commercial landlords and tenants can vary greatly. For instance, you may not have suffered any flooding or damages due to the wind and rain, yet you may have had a shutdown in your business due to protracted power outages. It is important to review your policy and characterize your total loss. A restaurant’s loss could include spoiled food or perishable inventory, for example. A clothing retailer’s loss may be the number of days the store remained closed due to power loss or other localized damage.
- How Does Your Insurance Policy Characterize the Loss? The precise language of your policy will determine whether you can recover for your losses, and in what amount. In a very recent development following the hurricane, the New Jersey Commissioner of Banking and Insurance has ruled that hurricane Irene did not generate sustained hurricane – force winds of above 74 mph as it hit New Jersey, (apparently the wind was measured at a peak velocity of 71 mph) and, accordingly, losses should not be characterized by insurance adjusters as having been caused by a “hurricane.” This has tremendous significance in connection with how losses are adjusted in New Jersey since many policies have very high deductibles for losses caused by wind and other damage associated with a hurricane.
This is good news for policyholders and should result in many more claims falling within coverage, within otherwise applicable policies. You should be aware, however, that many policies may not cover losses attributable to “flood” or related water damage driven claims.
This is all the more reason you need to examine your policy carefully, in consultation with your insurance agent or broker, and to seek legal assistance if the insurance carrier is not recognizing your claim in full, or is citing exclusions or other policy language inconsistent with your good-faith reading of the policy. These issues can be tricky, especially for most people who are unfamiliar with the nuances of insurance coverage, and examine their policies carefully only after a significant loss.
These are just a few of the issues commercial landlords and tenants will be dealing with over the next few months due to Hurricane Irene. Regardless of what insurance or other legal issues you face, Stark & Stark’s Commercial Landlord & Tenant, and Insurance Coverage Groups are available to assist you. Feel free to contact Tom Onder, Tom Pryor or Tara Speer in our Lawrenceville, New Jersey office, regarding these issues.