Post Sandy snowstorm complicates claims
The post-Sandy snowstorm that hit the Northeast last week caused additional damage for many homeowners and businesses, further complicating the insurance claims process that had already begun the prior week. Snow and wind damages from last week’s nor’easter hit several states including New York and New Jersey, delaying power outages and worsening road and rail traffic that had not yet been repaired from the effects of Sandy. This means ongoing trouble and further delay in negotiations between commercial policy holders and insurance companies over coverage issues.
Many adjusters were still in the process of identifying losses from Sandy when the second storm hit, making it increasingly difficult to determine which storm caused what damage to properties. Experts say the most significant questions are likely to surround business interruption and contingent business interruption coverages. Sandy not only caused billions of dollars in business interruption losses, but will likely be the cause of future litigation over business interruption clauses. Furthermore, since most policies have limits on the amount of time coverage lasts following a business interruption, the challenge involves figuring out whether or not the nor’easter caused new damage, or if it contributed to existing losses.
For homeowners, the issue of the early November nor’easter tends to be simpler, since questions around the storm are mainly centered on whether or not additional damage occurred and the specific cause of the damage (wind or water). On the other hand, business owners and large corporations must work with their insurers to determine where the different causes of their property damage because the causation will likely affect the terms of the policy.
Early indications from insurance insiders indicate that the two storms will be treated as two separate events, which will have immediate consequences for policyholders, such as two separate deductible payments and higher coverage costs.
Given the anticipated uptick in all types of property claims, especially business interruption claims, it is critical that policyholders have guidance from experienced professionals to assist them in presenting claims to the insurance carriers. Contact your WGA Account Executive or WGA Claims Professional for additional information and assistance.
About the Author
Ann Mizner McKay is the General Counsel and Senior Vice President at WGA. She manages the legal affairs of the company and also manages the Claims Department.