For those of us that practice in the area of property damage in Colorado, June 6, 2012, is a day with much notoriety. A large wind and hail storm passed through the state, causing extraordinary damage. Even though it was classified as a catastrophic event, many insurers still challenged damages, so I represented a high volume of clients from this storm. However, this was not the only thing that happened on this date in Colorado. Governor Hickenlooper also signed into effect Senate Bill 12-038, “Concerning Measures to Protect Consumers who Engage a Roofing Contractor to Perform Roofing Services on Residential Property.” The full act is available online, but I wanted to draw your attention to certain parts of it as they have been topics of many recent phone calls.
Commercial insurance policies are as varied as they are numerous. One thing they all generally have in common is coverage exclusions and high hurricane deductibles. New Paradigm Underwriters, LLC is offering a new insurance product called Hurricane PM. Hurricane PM is part deductible buyback policy part gap coverage that gets the insured paid from dollar one. The coverage is triggered by “a named storm exceeding a pre-determined wind speed.” In other words, where traditional wind insurance policies would have a named storm or hurricane deductible kick in, the Hurricane PM coverage activates to cover the out of pocket loss that might ordinarily be the insured’s to deal with.
Hurricane Danny was named the first hurricane of the Atlantic 2015 hurricane season. It is still far from Florida, however, if you are a Floridian, you might take the time to pull out your homeowners or commercial property insurance policy to review your coverage and what your duties are after a loss.
On the two year anniversary of Superstorm Sandy, Judge Travis L. Francis of the Superior Court of New Jersey, Middlesex County, ruled that the “[a]pplication of the Named Storm deductible for damage caused by Sandy [was] consistent with the clear and unambiguous language of the Policy.”1
If you live in an area of this country which is prone to hurricanes, you likely have a homeowner’s insurance policy which includes a separate deductible for a hurricane or windstorm event. A reoccurring question which plagues homeowners is: “When exactly does this deductible apply?”
Property insurance policies commonly contain a “Named Storm” deductible, which provides for a substantially higher deductible than other causes of loss. For example, the policy in AFP 104 Corp. v. Columbia Casualty Company1 contained a base deductible of $10,000 and a Named Storm deductible of $1 million per occurrence.
Knowing is half the battle…Do you know the specific amount of your hurricane deductible in your insurance policy? Do you know specifically if that hurricane deductible would apply to a Super-Storm Sandy claim? A Bill recently introduced this New York Legislative Session would specifically answer both these questions. It seems to simplify the amount and applicability of hurricane deductibles to policyholders in New York. Before the last couple of years, some might have scoffed at the idea this would occupy the New York Legislature; a hurricane in New York?! But after the last couple seasons, it makes perfect sense.
In the past few days, my colleagues in Florida have written some excellent blog posts on Hurricane Sandy, providing helpful tips to all those who have suffered property loss. I want to continue along the same lines, but with a focus on the topic of insurance policy deductibles.
If you haven’t already heard, last week the Weather Channel announced it will begin naming winter storms during the upcoming 2012-2013 winter season. This is a first for the U.S., where hurricanes and tropical storms are given names but winter storms have historically not received the same treatment. The Weather Channel’s goal is “to better communicate the threat and the timing of the significant impacts that accompany these events. The fact is, a storm with a name is easier to follow, which will mean fewer surprises and more preparation.”
A blanket property insurance policy covers different types of property at one or more locations and does not specify the valuation of the items protected under the blanket, but instead allocates an overall limit to the policy, upon which premiums are based.
The expression “blanket policy” is a term of art in the field of insurance. It appears to be most frequently used in connection with fire insurance policies and has acquired a rather precise connotation. A blanket policy is said to be one which contemplates the risk of shifting, fluctuating or varying, and is applied to a class of property rather than to any particular risk or thing…. A compound or blanket policy invariably covers and attaches to every item of property described in the policy and insures the property collectively, without providing in the event of loss for a distribution of the insurance to each item.