October 10, 2018, at approximately 2 p.m, Hurricane Michael hit Mexico Beach, Florida. With winds clocked in at over 150 miles per hour, Hurricane Michael was a Category 4 storm and one of the biggest ever to hit the Panhandle of Florida. 6 days later, the hurricane had ended and the people of the Panhandle of Florida went back to see the devastation that had hit their businesses and homes. Over 5 Billion dollars of insured losses were initially estimated. Mexico Beach and Panama City looked like a war zone.
We are 5 months down the line after Hurricane Michael hit and more than half of the commercial property claims are either still open or denied. One of the biggest mistakes made by claim holders is that they took the first offer that came to their door, or they hired the first contractor that they saw. As of January 25th, 11,928 commercial property claims have been filed and only 2,041 have been paid. Now, there is no data to show if claim holders were fully indemnified, but from our experience and our clients testimonials they usually are NOT. The other 9,887 claims are either still open or have not been paid, Slepcevic states.
If we take a look at past hurricanes like Harvey and Irma, we will see that close to 50 percent of claims were closed unpaid. That’s where the saying “40% of businesses never reopen after a disaster,” comes from. Just imagine opening your door and seeing the community you once knew and loved cut down the middle with only half of the stores still there. The Chief Financial Officer of Florida, Jimmy Patronis stated,
“I expect insurers will step it up so that families and businesses can get back to normal. If insurers don’t step up, not only will recovery be delayed, but consumers will be even more vulnerable to fraud.”
More than 100 days after Hurricane Michael hit land; 70 percent of commercial property claims are still open and 13 percent have been rejected, leaving business owners concerned that they may never reopen. As one of the thousands of impacted businesses, understanding why claims remain unpaid, how unpaid claims can affect you, and what to do after a disaster hits, your business can be adequately indemnified.
Few things are worse than having your insurance claim denied, especially after a devastating event like Hurricane Michael. It may come as a shock that this goes on, but it happens more often than not. Here some of the most common reasons for claim denials:
- Damage not covered in policy. Sometimes the policy does not cover all types of disasters. It is very beneficial to know what you are covered for.
- Coverage limit reached. Insurance companies don’t provide unlimited coverage. If the amount of damage claimed exceeds your policy limits on your declarations page, your claim might be denied, since the insurance company will not pay the excess.
- Waiting too Long to File a Claim. In this circumstance, if a claim is not made within a specific period of time after the disaster, the statute of limitations comes into play and the claim usually get denied.
- Did not meet the deductible. A lot of times, commercial property owners will choose a policy with a higher deductible to reduce the cost of insurance. In this case, if the deductible exceeds the amount of the damage, the cost of repairs is then placed on the property owner.
- Negligence. The best way to describe this to use an example. Let’s say that the roof caves in your building during a storm. The insurance company might come in and say that there was shingle damage prior and because you, the owner, were negligent to fix it, they will not pay.
Not getting your claim paid will result in either paying out of your pocket or your business closing down. The process of dealing with your insurance after your business has been impacted can be very difficult, and sometimes going through this alone without any help from professionals can take a huge toll on you. The question that needs to be answered now is, “What can I do today to speed this process up and eventually rebuild?” Here are 5 things you can do now to help the process move along:
- Make sure your claim is filed properly and promptly. Every insurance policy has its time limit so getting this done is priority number one.
- Protect your property from any further damage and make sure the loss is documented. Make sure that all of your personal property is documented and photographed so that there is a record of what was affected.
- Set up a team, within your company to deal with the loss. Each person you choose should be the most trustworthy because your businesses recovery lies in the balance.
- Gain control of the situation. This is your loss not the insurance companies. You must be proactive in the claims process. Make sure who ever is involved has all of the proper documents and is looking out for YOUR best interest not the insurance companies.
- Get the correct help. A great place to start is to consult with an independent legal professional, such as an attorney or a public adjuster, to help file your claim, document damages, and negotiate on your behalf. Doing so can be beneficial to your business and essential to making sure your claim receives adequate indemnification. Another resource available to you is a disaster management company. Their extensive knowledge and experience in catastrophic situations will guide you through the process and help you rebuild even better than before. They will provide on-site project leadership, consulting before, during and after events like hurricanes, wildfires, tsunamis, tornadoes and earthquakes.
Doing everything listed above will surely put you in the direction of a successful recovery. The main goal for each person affected is to get their business up and running as soon as possible. Getting help from an experienced Disaster Management Company, who will assist in the whole process, might be the solution you were looking for. Each day without progress is a step in the wrong direction. Every business deserves to re open and every community deserves to be rebuilt.
Steve Slepcevic 