POST-HURRICANE LAURA Q&A
Post-Hurricane Laura Q&A
Hurricanes are the definition of unpredictable. But, if we had to get technical, according to the NOAA a hurricane is a type of storm called a tropical cyclone, which forms over tropical or subtropical waters. When the storm reaches sustained winds of 74 mph or higher, it is then called a hurricane. The most recent Hurricane Laura devastated Lake Charles, Louisiana, and many neighboring cities. the MMA Law Firm team of talented storm recovery attorneys have been in Lake Charles ever since helping victims of the storm.
To continue to further educate commercial property business owners who have experienced property loss or damage, we have a post-Hurricane Laura Q&A covering the next steps post-storm damage.
WHAT ARE INSURANCE POLICY RESERVES?
Insurance policy reserves are the number of monies set aside by an insurance company to pay for claims that have or will be legitimately filed in a natural disaster situation. Now, what does this mean for your claim? Well, the impact of an insurance company setting the reserves for your claim can and will alter the entire trajectory of the claims process for you. The reserve for your property claim is set immediately upon your insurance adjusters’ first visit to your property.
Some truths about reserves include:
- Reserves are set early in the process of your insurance claim when your adjuster first “inspects” your property.
- Reserves represent the amount that the insurance companies plan to pay you for your loss, regardless of what you or someone else thinks the value of your damage is.
- Once set by your carrier, the reserves for your claim are very difficult to change or increase without the assistance of professional representation.
- Having representation (attorney) at your first meeting with your insurance adjuster has an enormous impact on what your carrier will value your claim at (and set the reserves at).
- In Louisiana, while public adjusters and other independent parties can adjust and provide evidence to the carrier regarding the actual amount of loss to your property, attorneys are the only professional with the authority to send demand letters to your carrier for final payment of actual damages above and beyond your reserve amount (Not to say public adjusters aren’t extremely valuable to the process, but sometimes, their involvement is not enough to force your carriers hand).
At the end of the day, your insurance carrier’s job is to minimize the amount they will pay you. When taking into consideration denials, insurance companies generally pay out 17 percent of the actual amount of damages and when they don’t deny, their first offer is generally around 50 percent of what the actual damage is. It’s nothing personal for them, it’s business and bottom line.
“Your insurance adjuster isn’t the devil, he or she is just trained to minimize your claim proceeds. It’s his/her job” said attorney Beau Killingsworth. That being said, you shouldn’t take it personally either. Simply educate yourself, understand the rules, and consult with the professionals around you to make sure your property loss doesn’t become a financial hardship for you long term. MMA is always here to answer your questions about large loss and insurance claim disputes.
WHAT ARE HURRICANE DEDUCTIBLES?
A common question the MMA team asks is “what kind of deductible do you have related to your Hurricane Laura claim?” The most common we have seen as a firm is the 5 percent wind/named storm deductible. This means that before your insurance benefits will kick in, you must pay an amount equal to that 5 percent of the overall policy limits of your policy. Disclaimer: this is not 5 percent of the value of your claim.
CAN ADJUSTERS LEGALLY DRAG THEIR FEET?
There are specific laws in Louisiana that disallow adjusters from taking away valuable time in adjusting a paying the claim. These laws are put in place specifically to prevent the situation where catastrophe occurs and property owners are injured (financially or otherwise) by stagnant inaction by their carrier.
So, “how did the Louisiana legislature attempt to prevent this?” They enacted first-party insurance laws that set firm details that an insurance company must follow. Below are the most relevant.
- Once notified, your carrier has (in a disaster situation) 30 days to initiate the adjustment of your claim (14 days if non-catastrophic and 60 days if it’s a federally declared emergency)
- Once you submit proof of loss to your carrier, they have an additional 30 days to submit to you a “written offer of settlement” of your claim.
What happens if the adjuster breaks the rules?
- Your carrier can be forced to pay penalties of 1.5 TIMES the amount of the claim as well as reasonable attorney fees and other costs: (This means that if the amount of the claim was $100,000 and the carrier was found in breach of these statutes, they would face a penalty of $50,000 on top of what they already owe you PLUS attorneys fees and costs)
- In some cases, if they wait to pay your claim for more than 60 days from receipt of your proof of loss, they may pay penalties of two times the amount of your claim.
Your carrier owes to you, the policyholder, it’s first-party insured, a “duty of good faith and fair dealing” when attempting to adjust and settle your claim. Adjusters can not drag their feet on a claim and if they were to do so, they can face immense penalties for doing so. These and other laws are here for your protection. It’s unfortunate that most have no clue they exist.
WHAT IS RECOVERABLE DEPRECIATION?
Picture this, you receive your policy estimate back from your carries and everything looks decent at first glance, but, there is a pretty large lump sum taken away from the line item totals.
Yep, you now have experienced what hundreds of thousands of policyholders have come to find out every year during catastrophic and chaotic storm situations. Below is what you need to know:
- There are, generally speaking, 2 types of property insurance policies: RCV policies and ACV policies. “RCV” stands for Replacement Cost Value, while “ACV” stands for Actual Cash Value.
- RCV policies are preferred by homeowners because the insurance proceeds paid by your carrier are based upon the replacement cost of your covered and damaged items
- If your policy is of the ACV type, your carrier will only pay you the amount that a lost item was actually worth at the time it was damaged; i.e. the replacement value of the item MINUS a certain degree of depreciation based upon the items age or the amount of wear and tear the item has experienced over time.
How do you determine which type of policy you have?
This depends on the wording of your policy! Some RCV policies will pay you the replacement cost of the damaged and covered item in full while some carriers will pay the insured the ACV amount upfront and release the remaining amount of “depreciation” to the insured once the carrier has proof that the damaged items were actually fixed. This is called “recoverable depreciation.” While RCV policies are preferred, insureds will have to pay higher premiums for such a pleasure.
The Large Loss Attorneys for the Job
We pride ourselves in standing up for rightful compensations and maximum recovery. We are the large loss attorneys for the job. Providing an aggressive, yet respectful approach allows our team to offer superior legal services. As a law firm, we pride ourselves on standing up for rightful compensations and maximum recovery, especially after a large loss like Hurricane Laura. In the event of a loss, we want you to have as much information and as many options for resources as possible. See how we can help fight for you and why Lake Charles and the Louisiana community hold a special place in our hearts. We protect the rights of policyholders by forcing insurance companies to uphold their contractual promises. Our attorneys are experienced in commercial insurance dispute litigation & commercial property loss. Complete the form below and find out how we can help you with your commercial property claims!
This blog published by MMA Law Firm is available for informational purposes only and is not intended to be legal advice on any subject matter. The content available on this website may not constitute the most up-to-date legal or other information.