Courtesy of iii.org.
Q. There is damage to my kitchen cabinets and my clothes as well as the roof and elevator of the building. Just who is responsible?
A. Usually, your own condominium insurance policy provides coverage for your personal possessions, structural improvements to your apartment and additional living expenses.
There is also a “master policy” provided by the condo/co-op board which covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways.
Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built, including standard fixtures. The individual owner, in this case, is only responsible for alterations to the original structure of the apartment, like remodeling the kitchen or putting in a new bathtub. Sometimes this may include not only improvements you make, but also those made by previous owners.
In other situations, the condo association is responsible only for insuring the bare walls, floor and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures etc. Your association’s bylaws and/or property lease will determine who is responsible for what.
If you have unit assessment coverage, if will reimburse you for your share of an assessment charged to all unit owners as a result of windstorm damage. For instance, if there is windstorm damage in the lobby, all the unit owners are charged the cost of repairing the loss.
Q. Will my business be covered for property damage?
A. The typical business owner’s policy covers damage due to wind, wind-driven rain and fire. So if your business has been damaged or destroyed by one of these perils, your insurance company will pay to have your business repaired or rebuilt. Flood damage is usually excluded or very limited unless you have purchased flood coverage from the NFIP or a private insurer.
Q. My business is shut down. Will my insurance cover lost revenue? If so, for how long?
A. Business income, or business interruption, insurance (BI) covers the profits a business would have earned, based on its own financial records, had the disaster not occurred. The policy covers additional operating expenses incurred as a result of the disaster such as the extra expense of operating out of a temporary location, even though business activities have come to a temporary halt.
Reimbursement under business interruption insurance is usually triggered by some kind of damage to the property where the business is conducted and only when the damage is the result of a covered peril such as fire. Evacuation orders do NOT trigger BI coverage. Acts of “civil authority” which preclude a business from reopening can trigger business interruption coverage if the declaration was the result of a covered peril. Generally, there is a deductible either in a flat dollar amount or a waiting time. If it is a waiting time, it is typically 24 to 72 hours, meaning that payments do not begin until the business has been disrupted for one to three days.
Most business interruption forms do not include coverage for perils such as emergency evacuation by civil authority or a major utility disruption, unless they were added by endorsement. Typically, when business interruption insurance is purchased, the timeframe for coverage is a year. The overall cost of BI is determined by the amount of coverage required during the period specified.
Q. How am I going to be able to rebuild my business and afford the cost of keeping the business going at another location?
A. If you have business income coverage, it will reimburse you for lost profits and continue fixed expenses during the time that the business must stay closed while the premises are being restored. If you have ordinance or law coverage it will help pay for the extra costs of tearing down the structure and rebuilding it.
Q. I’ve had so many extra expenses beyond my normal operating expenses. What am I going to do?
A. If you have extra expense insurance, it will reimburse your company for what it spends, over and above normal operating expenses, to relocate to avoid having to shut down during the restoration period. As with business income insurance, the price of extra expense insurance varies with the industry and the likelihood of disaster-related damage.
Q. My wife was killed in the fires. There are so many expenses. Who is going to take care of my children when I go to work? A. Life insurance benefits can be used for any purpose, including paying funeral expenses and child care costs.
Q. I’ve been paying for years for life insurance that has a cash value. Can I borrow that cash value or surrender the contract to get at that money? Who can help me with this? A. Borrowing and policy surrender are available. Borrowing would be the preferred choice because the death benefit stays in effect (minus the amount borrowed), but this is a loan that must eventually be repaid. If repayment is unlikely, they’re probably better off surrendering the policy for the cash. Ideally, they should discuss this with the agent who sold them the policy, or with someone in the life insurer’s customer service division, to place this option in context with other cash-raising options.
Q. I don’t have a copy of my policy, a home inventory or any documentation. What should I do?
A. Contact your insurance professional as soon as you are able. Your insurance company may send you a claim form known as a “proof of loss form” to complete. Or an adjuster may visit your home first. (An adjuster is a person professionally trained to assess the damage.) In either case, the more information you have about your damaged possessions—a description of the item, approximate date of purchase and what it would cost to replace or repair—the faster your claim generally can be settled.
Q. Will I need to obtain estimates for the repairs or will the adjuster do this for me?
A. Ask your insurance agent professional about requirements.
Q. Is there a time limit for filing a claim?
A. Insurance policies general place a time limit on filing claims which vary from state to state and company to company. Check with your insurer to see what the time limits are.
Q. What can I do if I am having trouble settling my claim?
A. If you are dissatisfied with how your insurance company is handling your claim, you have several options: talk to the agent or company representative who sold you the policy and let the agent know you are dissatisfied; contact the company claims manager and provide a written explanation of your problem with copies of supporting documentation; contact your state insurance department; consider mediation if you cannot reach an agreement with the company directly.