Hurricanes and Windstorm Coverage


ADJUSTING TODAY comply with current building codes, can be added to your policy. As building codes evolve each year, it is strongly recommended that you understand the exposure you could face if a major windstorm, or any type of loss — damaged your home or building, and what codes would be triggered upon reconstruction.

Debris Removal Coverage

How far does it go?

Debris removal is an expense often incurred in the aftermath of a windstorm. In the event of an extensive loss, some policy language for debris removal allows for an additional 5, 10 or 25 percent of debris removal coverage above the policy limit. Your policy language may clearly outline the additional coverage, or the wording may be ambiguous, causing a potential disagreement with the carrier over your payment. To avoid this problem, be certain of your coverage before you need it.

Business Interruption and Extended Period of Indemnity

Do I have enough? How far does it go?

If you run a business, there is no greater life support to its survival than business interruption coverage. Having adequate coverage for the profits you would have earned had the disaster not occurred provides the support you need while rebuilding your business, a process that can take several months or longer. Business interruption coverage can also pay for continuing expenses, such as payroll, while your operations are down.

A business owner may choose coverage at a fixed dollar limit, or for the “actual loss sustained,” which covers your loss from the date the coverage is triggered to the return to “normal business operations.” In addition, an “Extended Period of Indemnity” is an endorsement option that will extend your business interruption claim beyond your return to...

Case Study:

A popular beachside restaurant on the coast of South Carolina suffered major damage due to a windstorm that tore off the roof and flooded the interior. The restaurant was shut down for four months, and after rebuilding, it took several weeks to get the normal flow of customers back into the restaurant. The normal business interruption coverage indemnified the insured for the four months that they were out of business. But, as in most businesses, it took many weeks for customers to realize that the restaurant was again open.

Fortunately, the restaurant owner had an “extended period of indemnity” for 60 days built into the insurance policy, which allowed the business to continue to collect its lost profits until the customer base returned to a steady stream two months later. An extended period of indemnity begins the date a business returns to “normal business operations.” In this case, the extended period of indemnity began the day the restaurant re- opened their doors for business after complete reconstruction.

Case Study:

Referencing the earlier case, the same Tennessee-based business believed that the language in their policy allowed for 10 percent in additional coverage for debris removal above the policy limit of $1 million. The insurance company’s interpretation of the policy was that a maximum of 10 percent was payable for debris removal up to the policy limit of $1 million. This disagreement had the potential for a lawsuit, as the cost to remove the debris for the building damage was $140,000.