King Law | Free Guide To Common Natural Disaster Insurance Challenges
Buildings and power lines damaged by a hurricane; natural disaster insurance coverage concept.

Natural disasters such as tornadoes, winter storms, and hurricanes often leave not only loss of life and immense property damage, but a deluge of paperwork for disaster survivors to navigate. The natural disaster insurance claims process can be challenging and frustrating even when claims are approved. When seemingly legitimate claims are initially denied, individuals who are still struggling to sort through the destruction can easily begin to feel overwhelmed by the natural disaster insurance claims process. An attorney experienced in navigating natural disaster insurance claims can often help by reviewing policy documents and comparing them with repair estimates and reports of damage, offering property owners some much-needed realistic perspective and recommendations for how to proceed. Schedule a consultation with a member of the King Law Offices teams in upstate South Carolina or throughout North Carolina today by calling 888-748-KING.

Natural Disaster Insurance Coverage for Vehicles

While photographs and videos of the destruction caused by hurricanes often focus on uprooted trees and homes or businesses flooded by storm surges, one of the most widespread types of property damage after hurricanes, earthquakes, and many other natural disasters can be the loss or destruction of vehicles. The damage may be particularly pervasive among personal automobiles, which are usually stored at ground level and in many cases are parked in driveways or “carports” partially open to the elements, lacking the protections that may sometimes be available in the maintenance and repair yards often used by large commercial fleets. In addition, the damage coverage afforded by private auto insurance policies intended for personal “passenger” vehicles is in many cases less robust and often has lower total payout caps, than the coverage associated with commercial auto insurance policies. All of these factors can lead to a spike in car insurance claims after a natural disaster, frequently exacerbated by the policyholder’s uncertainty about the types of natural disaster insurance commonly available under personal vehicle policies.

Does Car Insurance Cover Hurricanes?

Whether an auto owner is able to receive an insurance payout to cover the cost of damage to their personal vehicle caused by a natural disaster may depend partly on the type of damage sustained, and to an extent on the type of natural disaster involved. Natural disasters that create hazardous road conditions may lead to circumstances that would have the potential to activate a liability or collision policy in ways that other catastrophic weather events might not, while non-weather disasters such as wildfires or earthquakes can present their own sets of challenges. The terms of the specific policy will of course also play a role in determining whether auto damage is covered in a particular instance. In general, however, one of the main factors determining whether car insurance covers damage caused by a natural disaster is likely to be the type of policy the owner carries on the vehicle.

Allowing for variations in coverage dependent on individual plans and insurance companies, auto insurance is generally offered in three broad categories. Each category offers a distinct range of covered events, and the different categories tend to be associated with some differences in scope as well.

Auto Liability Insurance in Natural Disasters

Liability auto insurance is the type that probably comes to mind most immediately for the greatest number of people. This is the type of coverage that is required by the “proof of insurance” laws in many states. Liability insurance, as its name suggests, is intended primarily to cover damage caused by the insured vehicle (or by its driver, while operating the vehicle): The purpose of auto liability insurance is to make sure that, if the covered vehicle is involved in an incident in which its driver is at fault, the parties harmed by that incident will have a clear pathway to compensation for the costs of repairs to their own vehicles, alongside medical bills for accident-related injuries and other expenses arising from the incident.

If your car loses traction with the road as you are driving home to shelter through a natural disaster such as a blizzard or hurricane, and you collide with another vehicle, or in the same scenario miss another vehicle but run off the road and damage someone else’s property (such as a fence or mailbox) as a result, then a liability auto insurance policy will likely cover your personal liability and prevent you from having to pay “out of pocket” for the damages done to the other person’s vehicle or property. In most cases, however, liability insurance will not cover damage caused directly by a natural disaster, such as hail damage to a windshield.

Collision Insurance

Collision car insurance is a very common requirement in auto financing agreements. Because the vehicle itself typically serves as the collateral for the loan, banks and other auto loan services frequently require collision coverage as a condition for approving auto loans. This type of insurance generally covers the costs of repairing or replacing the covered vehicle if it is damaged in an accident with another vehicle, regardless of who was at fault. Unfortunately, however, collision insurance will in many cases not cover the costs of damages arising from types of accidents that are not strictly vehicle-on-vehicle collisions. The details can vary from one policy to the next, however, so you may wish to review your own policy documents to look not just for natural disaster insurance coverage but for potentially related types of coverage for which your damage might qualify, such as single-vehicle accidents.

Comprehensive Auto Insurance Coverage After a Natural Disaster

Auto owners with “comprehensive” car insurance policies will likely be the ones in the strongest positions for filing natural disaster insurance claims. While any specific policy may have its own set of exclusions and it is generally a good idea to review your policy’s terms prior to filing a claim, comprehensive coverage is by its nature intended to account for a wide range of scenarios, and in many cases may cover types of events that do not fit neatly into either liability or collision policy categories. An insurance lawyer may be able to help you review your policy terms if you are denied for damages related to an event that you think falls within your comprehensive auto insurance policy’s description of coverage.

Common Problems With Homeowners’ Natural Disaster Insurance

Many of the most harrowing natural disaster insurance challenges are those commonly faced by homeowners. After a cataclysmic event such as a flood, tornado, or hurricane, it is common to encounter news reports detailing the unhappy stories of homeowners who have turned to their insurance policies after losing everything, only to have their claims denied.

A homeowner’s options for pursuing relief will generally depend to some extent on the reason given for the denial and the terms of the specific policy. An attorney from King Law Offices may be able to review your policy documents and answer questions specific to your unique situation. In general, however, there are a few steps homeowners can take to put themselves in a strong position as they navigate natural disaster insurance claims.

Recognize What Qualifies as a Natural Disaster

The United States Department of Homeland Security (DHS) classifies any severe weather event, such as a tornado, hurricane, or winter storm, as a natural disaster. In addition, DHS also considers a few other types of naturally occurring events that are not necessarily direct meteorological phenomena, such as wildfires and earthquakes, to qualify as natural disasters. DHS oversees the Federal Emergency Management Agency (FEMA), so understanding what DHS does and does not consider to be a natural disaster can offer a useful point of reference to individuals who may need to consider federal relief programs as well as private insurance coverage for a natural disaster.

Be Aware of Common Natural Disaster Insurance Exclusions

The Insurance Information Institute (III) provides a chart that many homeowners may find helpful in determining whether their policy will cover damage from a specific type of natural disaster. One caveat to note here is that individual policies and plans may have their own exclusions; just because coverage for a specific type of weather event or other natural disaster is common under a given category of homeowners’ insurance is not necessarily a guarantee that every policy in that category will cover related damage.

Two types of natural disasters are typically excluded from coverage under the most common categories of homeowners’ insurance:

  • Floods
  • Earthquakes

The III explains that homeowners’ insurance policies in the standard categories do not normally cover damage from earthquakes (although they may cover losses from fires that are caused by earthquake damage). Insurers in areas considered to be at high risk for earthquakes sometimes offer earthquake coverage as an optional add-on policy. Flood damage is also not typically covered under most homeowners’ insurance policies. Both FEMA and some private insurers offer flood insurance options to be purchased separately, but according to FEMA’s estimates, only about 4% of homeowners in the United States are insured against catastrophic flooding.

Compare Repair Estimates Against Policy Deductibles

Many homeowners’ policies include substantial deductibles. As the National Association of Insurance Commissioners (NAIC) explains, it can be a good idea to get a rough estimate of the likely cost of repairs before filing a claim. If the total cost is likely to be similar to, or not very much greater than, the cost of your deductible, then paying out of pocket and keeping the claim off your insurance history may make more sense in the long run than proceeding with a claim, even if the claim is likely to be approved.

Filing Business Insurance Claims for Natural Disasters

Homes and vehicles are not the only types of property to suffer substantial damage during natural disasters. Tornados, hurricanes, and other events can turn an office building to wreckage or decimate inventory in much the same way that they can rip the roof of a residential building or damage a car.

Considerations for Property Owners vs. Commercial Tenants

Business insurance policies tend to differ somewhat by industry, as many business owners seek policies tailored to their industry-specific risks. Additionally, many businesses operate out of rented spaces, as commercial tenants, which can affect the type of property damage your business sustains.

If your business is renting office, retail, or storage space as a commercial tenant, a landlord’s commercial property insurance may cover many types of structural damage, not just to buildings but to parking lots or garages and property access routes. In general, however, that type of insurance is unlikely to cover damage to tenants’ “movable” property located within the premises, such as inventory or critical equipment.

Natural Disaster Coverage for Non-Property Business Losses

There are a number of expenses besides property damage that can impact a business in the wake of a natural disaster such as a hurricane. Check your business insurance policy carefully to determine if you may be covered for such eventualities as loss of income during the rebuilding process. Some business insurance policies may also help to cover wages paid out to salaried employees while a business is closed for repairs to its premises. Clarifying what is and is not covered under your business insurance policy may help you determine whether you are eligible to file a claim, and for which types of damage.

Natural Disaster Insurance Steps To Take

The specific claims procedures you may need to take after a natural disaster will depend on the terms of your insurance policy and the type of damage you have sustained, among other factors. However, there are a few steps that most insurance policyholders can take that may help to improve the chances of a successful claim process while keeping stress to a minimum.

Review Policy Documents Before Filing a Claim

After a natural disaster, it is too late to alter the terms of your specific policy or secure additional coverage for the event that has just occurred. However, being familiar with what is and is not covered under your current insurance policy can save you time wasted on filing claims that are sure to be denied under the policy’s terms – and put you in a strong position to argue your case if you file a legitimate claim that gets an initial denial.

Compile Documentation

No matter what kind of disaster you have experienced, you are likely to need some form of documentation in order to show the insurance adjuster the extent and type of the damages to your property. Aim to be comprehensive; documentation for insurance claims is often a “more is more” scenario. “Before and after” photos can be excellent tools for clarifying the extent of damage to a home or business structure; if a natural disaster has resulted in the loss of, or damage to, personal or business property (for instance, computer equipment, stock inventory, personal clothing, or valuable entertainment hardware such as video game consoles), then a listing of the items damaged or destroyed and an estimate of their value may also be helpful.

Get Estimates for Repairs

When practical, you may want to solicit repair estimates prior to filing a claim. This can be especially true if the damage to your property is not obviously extensive, as in cases of less severe damage a high deductible can mean that even an approved claim may not save a property owner enough money to justify both the trouble of filing and the potential impact on premiums.

Avoid Volunteering Information

If you do decide to file a claim, the insurance company will likely send an adjuster to take their own photos of the damage you have reported. The adjuster will typically ask a number of questions in order to better understand how the damage occurred, and you may be asked to provide your documentation (be sure to keep a copy for your own records).

Policyholders will obviously need to provide appropriate and relevant information in order to facilitate the processing of their claims, but in general, it is a good idea to avoid volunteering information to the insurance adjuster or any representative of the insurance company. The sad truth is that insurance fraud does happen, and insurance adjusters and insurance representatives are trained to be professionally suspicious to protect their employers’ bottom line. In the right context, it is easy for even an entirely innocent remark to be misinterpreted as evidence that could undermine a legitimate claim – for instance, a homeowner might offhandedly mention a previous storm’s high winds, thinking of how that event left their home undamaged, while an insurance adjuster, primed to be wary, might perceive the remark as an unintentional disclosure of pre-existing damage that might not be eligible for coverage.

Speak With an Attorney To Address Your Concerns

The challenges resulting from natural disaster insurance claims can come in many different varieties, depending on the type of disaster, the type of property, and the specific damages involved. Confusingly, many policies will cover damage caused indirectly by a natural disaster (such as damage from car accidents precipitated by hazardous road conditions during a storm), but may deny claims for damages caused directly by the same event. Additionally, many individuals have distinct policies covering their homes vs. vehicles, while those who own businesses often have an entirely separate set of insurance policy concerns they will need to navigate in order to ensure coverage for business losses resulting from a natural disaster. A consultation with an insurance lawyer can often be extremely helpful in sorting through the chaos and evaluating options for how to proceed. To learn how a member of the King Law Offices team in North Carolina or at any of our locations in South Carolina may be able to assist you, call 888-748-KING today.

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