As an in-house insurance company lawyer (albeit not in casualty) I emphatically second this advice.
Also note her age and recent loss of her husband in the letter. Don’t be afraid to twist the knife.
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I’d been hoping to submit a claim to Liberty Mutual, which holds my commercial policy, for replacement of business income over the next however-many-weeks. My policy however includes this bit:
NOTICE TO POLICYHOLDERS
NORTH CAROLINA
FLOOD, EARTHQUAKE, MUDSLIDE, MUDFLOW, LANDSLIDE
AND WINDSTORM OR HAIL LOSSES NOT COVERED
North Carolina law requires the following warning:
WARNING: THIS PROPERTY INSURANCE POLICY DOES NOT PROTECT
YOU AGAINST LOSSES FROM FLOODS, EARTHQUAKES, MUDSLIDES,
MUDFLOWS, LANDSLIDES, WINDSTORM OR HAIL. YOU SHOULD
CONTACT YOUR INSURANCE COMPANY OR AGENT TO DISCUSS YOUR
OPTIONS FOR OBTAINING COVERAGE FOR THESE LOSSES. THIS IS
NOT A COMPLETE LISTING OF ALL OF THE CAUSES OF LOSSES NOT
COVERED UNDER YOUR POLICY. YOU SHOULD READ YOUR ENTIRE
POLICY TO UNDERSTAND WHAT IS COVERED AND WHAT IS NOT
COVERED.
In conjunction with the foregoing (and reviewing the entire policy), note that this policy may include one or more of the following
forms or endorsements, which provide certain coverage:
BP 88 14 EARTHQUAKE COVERAGE
BP 80 56 MEDICAL OFFICE ENDORSEMENT
In addition, other than the application of a deductible, limitation, etc. (which will apply if contained in this policy), this policy only
excludes wind or hail if it contains the following:
BP 81 65 WINDSTORM OR HAIL EXCLUSION – NORTH CAROLINA
Am I SOL, or what do people do in these situations?
It is customary for commercial insurers to exclude catastrophic natural perils from regular business (and homeowner) policies. If you live in Houston, your policy will always exclude flood. If you live in Galveston, it will exclude flood and windstorm. If you live in California, it will exclude earthquake and wildfires.
Your agent should have offered you a supplemental policy for the excluded perils. If they didn’t, you may have cause of action against them, but the bold font disclaimer you cite from the policy might be all the defense they need. It looks like you have a write-back for earthquake but you do seem to have exclusions for flood and windstorm intact.
Unfortunately, business income coverage needs be triggered by a covered peril. If you don’t have a covered peril then BI coverage starts to evaporate quickly. There are sometimes extensions for things like damage to a customer’s premises or denial of access to your premises, but you’ll have to get into the weeds of the policy to see if you have any avenues for recovery there.
Sadly, this is the fragmented nature of commercial insurance and one of the (many) reasons that people fucking hate it. You don’t find out what you’ve got until it gets stress-tested, and then it’s too late if it’s not right.
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I’ll defer to Limey’s answer since BIC (or P&C generally) is outside my expertise. But I’m hopeful that for a disaster like this, even if insurance won’t pay, there may be funds made available by legislation.
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This would be a good time to ask all legislators up for election in NC if they think that it’s a good idea that FEMA et al visit and help out.
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Most home insurance policies I ever held excluded flood but did cover if the rain came through a roof and caused damage. When I moved to a river front property, my mortgage company required that I carry flood specific insurance via FEMA. Once I paid off my mortgage, I cancelled my policy because it was close to $5,000 a year. I’m currently seeking a lower cost alternative, in case it ever starts to rain a lot in Central Texas again. I’m about 40 feet above the river bed and the worst flood the area has ever seen, back in '98, the water, according to neighbors, just barely reached the foundation and wet the floors.
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You’re a funny guy.
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Yeah, I was about to say, this would not be a top of mind concern for me.
For some reason Buddy Holly’s “All I Have To Do Is Dream” just popped into my head
In my dreams it’s the Everly Brothers singing.
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Why the hell did I think that was a Buddy Holly song?
Gee whiz, I don’t know.
I recall that many residents of New Orleans got royally fucked by insurance companies after Katrina because of the distinction between flood damage and water damage. Their houses had sustained water damage from the roofs being ripped off and the rain getting in, and were then flooded. Or was it the other way around?
So the Homeowners insurers said that all the water damage was from flood, and denied that part of the claim. If the homeowner had flood insurance, the flood insurer - because it’s separate by design - said that all the water damage was from rain incursion. [Insert Spider-Man pointing meme here]
They both knew they owed something, but they did this dance knowing that the destitute homeowner would never be able to mount much of an effort to get any money and so there was a good chance that they could both scoot. Thus, a homeowner whose house is insured for both windstorm and flood, and is hit by windstorm and flood, is unable to collect a cent from said insurance.
If you’re wealthy enough, you don’t have to buy the pre-set policies from standard insurers, and can get a non-standard policy that has it all rolled into one (with a single deductible).
But there’s an even more simple solution that states could mandate: a Joint Liability Clause. This says that if there are two policies that can be expected to pay part of a claim, each insurer is required to pay 50% of the estimated loss to make the policyholder whole, and they can argue amongst themselves later about the actual split. It’s so simple and obvious and - after the scandal of Katrina - should be de rigueur in most/all states.
I also remember that there was disagreement on whether the flooding from Katrina was caused by the storm itself or by the breach in the levees. Insurance companies argued it was caused by the rain, therefore an “act of God” and not covered. Plaintiffs argued it was the failure of the levees due to man-made construction/maintenance issues that were at fault and should be covered. The courts ruled that the policies were sufficiently ambiguous to allow the insurance companies to deny claims. Bottom line: insurance companies purposely make the policy language vague because courts have consistently ruled in their favor on vague language.
I have always understood that any ambiguity in an insurance policy inures to the benefit of the insured, especially if the insurance company wrote the policy.
I have not ever had to prosecute a disputed claim in Louisiana, though.
I don’t think that’s how it works in real life. The ambiguity benefits the deepest pockets. Of course, in Katrina, I think it was a situation that no one had remotely considered. On a side note…part of the court’s rationale in favor of the insurance company was that it would have cost the insurance companies a huge amount of money, and that would be an undue burden on them to have to pay so many claims at one time. In short, they were too big to fail, and forcing them to pay claims could cause them to fail.
The law is any ambiguity is construed in the insured’s favor, but sometimes the sausage comes out weird.
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As Bench said. And he’s pre-med.
Just got a text from my cousin who lives in western NC. She and her family are fine, but her house is gone. They’ve lost everything. Man this was a bad one.
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That’s awful. I’m so sorry for all the folks whose life has been upended.
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