Managing multiple storm claims

Many businesses in Florida that could be affected by major Hurricane Milton are still recovering from Hurricane Helene. For organizations that may have to file additional claims, it’s vital to identify and differentiate specific losses stemming from each event, as that will dictate how a property policy’s time element coverage, such as business interruption, will respond. But that’s easier said than done.

What’s the damage?

A property policy’s time element coverages are typically triggered by covered physical damage and measured during the period of time physical damage to a property occurs until it’s repaired or restored, known as the period of restoration.

Certain time element coverages may be extended to provide coverage for loss of income during a specific period of time after physical damage is repaired, but before revenues and earnings return to pre-loss levels. This period, known as an extended period of indemnity, can range from 30 days to one year.

If your business suffered physical damage from two hurricanes, it could raise questions about how your coverage should respond. If damage from the first hurricane resulted in a six-month projected period of restoration, but additional damage from the second hurricane resulted in a nine-month projected period of restoration, then you and your insurers will need to consider two critical questions:

Was the six-month projection for the first hurricane accurate?
Did the second hurricane actually cause an additional three months in repair and restoration time?

To complicate matters, you may have renewed your property policy on October 1, meaning that losses from the first hurricane would be covered under your previous policy, while losses from the second hurricane would be covered under your new policy. And if you changed carriers at that time, a dispute could arise between insurers about the allocation of losses between the two policies.

It’s also important to consider National Flood Insurance Program coverage. If applicable, you would need to file a notice of flood loss for each event and submit a proof of loss within 60 days.

Collaborating with adjusters and advisors

Many businesses, together with their risk and insurance advisors, should be able to calculate their periods of restoration for losses from Helene already. But there’s no single formula to make these calculations, and they’re rarely considered final. Typically, businesses do not truly know whether estimates were accurate until repairs are complete.

Every method requires businesses to work closely with their insurers’ claims adjustment team, especially when faced with complex losses from multiple events within a short period of time. You should be in regular contact with your insurers’ adjustment teams and their experts, making sure they’re aware of new developments and information that could be useful in calculating the damage caused by each event. While you and your risk and insurance advisors will be looking to maximize recoveries, your insurers will be looking for both losses to be fully documented before making a final determination.

As with any time element claim, it’s important to:

Document all damage
Establish a clear timeline of events
Provide insurers with the right information
Calculate the scope and quantum of damage
Allocate losses properly between the two events to best determine how coverage should apply

Taking steps now and early after the next storm — in collaboration with your insurers and your risk and insurance advisors — will help streamline your claims from multiple storms and help you recover faster.

For more information, visit our Hurricane Resource Center or get in touch with our claims specialists.

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Managing multiple storm claims

What’s the damage?

Collaborating with adjusters and advisors