Fortunately, South Florida was not slammed this past hurricane season as the forcasters predicted. Now, with the holiday season here, the last thing on many policyholders’ minds is the ramifications surrounding hurricane claim settlements and restoring affected property. In my December 13, 2010, post titled Hurricane Law Tip – Document Hurricane Repair Expenditures Even After a Claim Settlement, I wrote about the importance of documenting repairs to property following a hurricane claim resolution. The focus of that blog was directed toward policyholders themselves. However, everyone involved in the first-party property insurance industry can do one thing for the policyholders who may not have the pleasure of reading the hurricane law blog posts. With the New Year approaching, we can make a resolution to discuss with our policyholder clients the importance of making repairs and documenting them after a hurricane claim resolution.
It seems like such an elementary issue, but from what I have seen in practice, many policyholders have a long list of questions/concerns about steps to be taken even after they achieve a favorable outcome in their claim. If we stop to think about it, those of us in the industry may find that we have not had lengthy informative discussions with policyholder clients regarding the important steps concerning documenting and completing repairs to hurricane damaged property after their claims are resolved.
Policyholders may feel the crunch of the economic times, yet there are a few important steps that can be discussed with them during the claim process and particularly when they receive a claim payment. Step one is explaining the importance of repairing the damaged property included in the insurance claim payment. Repairing the damage will decrease the chances of an insurer denying a later claim on the basis that the cause of damage was the earlier hurricane. It will not necessarily keep the later insurer from asserting a defense of causation or insufficient repairs, but it places the policyholder in a stronger position for the later event in meeting their burden of proof. Step two is to recommend the policyholder consider hiring a licensed and insured contractor to conduct the necessary repairs to the property and to have the necessary permits pulled with the local building authority. This will serve as evidentiary support the the repairs were made, should a laater claim occur. Again, an insurer may still present a defense to the later claim and assert insufficient repairs as a cause of damages, however, the policyholder will have a stronger case than if the repairs are done by a handy man who they may not be able to locate later. Step three is to recommend policyholders maintain the documentation of repair expenditures following a favorable resolution of their hurricane claims as discussed in Hurricane Law Tip – Document Hurricane Repair Expenditures Even After a Claim Settlement.
Explaining the importance of these steps to policyholders when their claims are resolved can make the difference in a later claim.