Recovering from Lane: 3 Claims Priorities
The punishing effects of Lane, including heavy rain and wind, have been felt across much of the Hawaiian Islands the last several days. Power outages and other interruptions have been commonplace, while some businesses have had difficulty accessing their properties because of blocked roads, flooding, mudslides, and government orders to avoid specific areas. As businesses begin to return to normal operations, they should review applicable insurance policies and prepare to file claims as needed.
Named Windstorm or Flood?
Every property insurance policy includes specific definitions of key terms and coverage triggers. One of the most important to understand is the definition of wind-driven water, also called “storm surge.” Some policies consider storm surge under the definition of flood while others consider it under named windstorm. How does your policy define it? Depending on the nature of any property damage you’ve suffered as a result of Lane, the answer to this question could drastically affect how your policy responds and how limits and deductibles apply.
Ingress/Egress and Civil Authority
When governments shut down particular areas or prohibit access to specific locations following a natural catastrophe, two common extensions in property insurance policies will often come into play:
- Ingress/egress: This applies when insured locations are surrounded by floodwaters and/or roads are inaccessible.
- Civil and military authority: This applies when a government order limits access to your property.
Specific policy wording and interpretation by insurers is critical to determining whether either or both of these extensions will apply in your specific circumstances in the wake of Lane. For example, your ingress/egress extensions may only apply if access is “prevented” or “impaired,” while questions have been raised in recent years about whether informal recommendations by politicians for people to stay home during and after a storm constitutes a civil or military authority order. In addition, policies may include distance limitations stating that damage preventing or impairing access must be within a specified number of miles from your insured location.
Although individual property policies may vary, many provide protection from the effects of power outages. These policies usually apply after a waiting period, typically 24 to 48 hours, and will only be triggered by damage to a utility’s property. Some policies provide similar coverage for interruptions of gas, water, telecom, and sanitation services.
Service interruption claims generally require you to provide specific loss documentation, including:
- The precise timeline of any service interruptions.
- Evidence of their notice to utilities.
- The true nature of an interruption, including the type of equipment damaged, the cause, and its distance from insured premises (especially important to convey when you have losses arising from transmission and distribution lines damage).
- Damage to affected properties and the nature and duration of any losses.
Recovering from Lane, like any major storm, may require time and resources. Understanding your coverage now can help you lay the groundwork for potential claims early and improve your chances of quickly resuming normal operations, maximizing your insurance recovery, and preparing for future storms.