In October 2012, Hurricane Sandy hit parts of the Caribbean, Mid-Atlantic and Northeast United States with devastating force. It began as a tropical wave in the western part of the Caribbean Sea but it quickly gained strength and became a tropical storm 6 hours later. It moved through Greater Antilles and portions of the Caribbean region, intensifying and weakening briefly and then re-strengthening once again as it neared Atlantic City, New Jersey with hurricane-force winds.
Hurricane Sandy was classified as a Category 2 storm. Even before it reached its peak intensity, it became the largest recorded Atlantic hurricane. It swept through 24 states, affecting the whole eastern seaboard. New Jersey and New York in particular saw significant damage as streets, subway lines and tunnels were flooded and millions were left without electricity for days.
There was every indication that Hurricane Sandy had a massive impact, including tragic fatalities, direct property damages and significant business interruption. In the United States alone, the damage from the storm is estimated at more than $63 billion. After the storm, homeowners and business owners were left to deal with not only cleanup but also insurance matters. Business insurance reports estimate an unprecedented number of claims as a result of Hurricane Sandy which could amount to $5-$20 billion in total losses.
When it comes to insurance filing, it is best to contact the insurance company right away when a disaster strikes to notify them of the claim because processing is on a first-come first-serve basis. Ask the adjuster what information is needed so these can be gathered and provided to them as early as possible, submitting data as it is being collected to save time.
Business owners must also stay organized with their records of cash outflow, meaning bills should be separated from any expenses they incurred from temporary changes to their business that were necessary to keep customers. In assessing damages, business owners should hire an expert instead of relying on personal guesswork because they could be locked into a far too low figure.
It is also very important to speak with the insurance company to arrange for interim partial payments because business owners should be getting the actual cash value of their loss once it is measured and agreed upon. Insist on a reasonable deadline for the claim to be resolved. Do not hesitate to take a hard line because, in many cases, the lack of assertiveness results to the claim being given a low priority.
Also, make sure to keep a written record of dealings with the insurance company with regards to the claim to dissuade dilatory or negligent claims handling. It would also benefit the business owner to hire an expert on business insurance claims because while he or she may know all about the business side of things, the process of filing business insurance coverage and claims adjustment involve arcane issues and practices that require special knowledge.
Lastly, if the business owner fails to resolve a claim through negotiation, the next options are either appraisal or litigation. However, it is very possible to reach a satisfactory resolution to business insurance claims within a reasonable time period if the policyholder takes hold of the process from the start and show resolve in securing their rightful coverage.
contributed by Michael Mann — a corporate accountant who writes for a variety of business and accounting sites (for an example, click here) and is a frequent blogger on finance and news blogs.