When Natural Disasters Strike

Advice from insurance coverage attorneys on how to weather the legal storm

By Nancy Henderson | Last updated on March 6, 2023

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The last thing Floridians had on their minds in late September 2022, with Hurricane Ian bearing down on their state, was exactly how much their insurers would pay if their homes sustained damage from wind as opposed to water. But attorneys who focus on insurance claims say those are exactly the kinds of nuanced details you should nail down before disaster strikes.

From tornadoes and hailstorms to wildfires and earthquakes, scientists agree that the frequency and severity of natural disasters are increasing due to climate change—and won’t be stopping anytime soon.
They can also happen anywhere, even if you think you live in a “safe” part of the country.

“There were people in the interior of Vermont who never dreamed that they would face exposure from a hurricane,” recalls Robert J. Gilbert, an attorney with Latham & Watkins in Boston. “Suddenly, the creeks overflowed and turned into rivers. The rivers turned into lakes, roads and bridges were washed out, homes were swept away, and the state was paralyzed for months because it was essentially impossible to go east to west.

“If it can happen in Vermont,” Gilbert says of Hurricane Irene in 2011, “it can happen anywhere.”

Still, many Americans prefer not to think about the possibility of a natural disaster, much less how much insurance they would need to rebuild, replace or repair. “The events seem more remote in our minds,” says Joshua Mallin, an attorney with Weg & Myers in Rye Brook, New York. “That’s why we tend not to get that insurance, or push that off to another day.”

The Calm Before the Storm: Insurance Shopping

But if you’re done pushing it off, or simply reviewing your current policy, consider more than just how much you’ll shell out for the annual premium. If you’ve recently upgraded your home or business, or added any significant features, see if they’re covered. They may not be. And remember that construction costs have skyrocketed across the country, so it might cost more than you think to rebuild.

Choose “all-risk” coverage, not a policy limited to specified perils such as lightning and fire. And be sure to opt for “full replacement,” which will pay for you to rebuild your dwelling based on current values, Gilbert says. You’ll pay extra for the policy, but it’s worth it, he adds. If your home is insured for $400,000 and it’s actually worth $800,000, you may also get hit with a coinsurance penalty for not buying enough coverage. “It’s a trap for the unwary,” he says.

Mortgage lenders are increasingly likely to require certain types of coverage, depending on where you live. Flood insurance, for example, is recommended throughout Florida, where hurricanes have strengthened in recent years. Subsidized coverage is also available through FEMA’s National Flood Insurance Program and can be supplemented by private insurance riders or endorsements.

Insurance policies are not easy to interpret, but it’s important to read the fine print, says Jordan Dollar, an attorney with Dollar, Burns, Becker & Hershewe in Kansas City, Missouri. He’s aware of people with insuring agreements that, although the first page stated the company would provide coverage for certain disasters, the wording was overridden by an endorsement 20 pages later.

“You might as well take a Sharpie to that first page,” Dollar says. “But it was still in there. It’s really confusing, even to lawyers sometimes, as to how to read these policies comprehensively and in a way that makes sense.”

Stephen Marino, managing partner at Ver Ploeg & Marino in Miami, Orlando, and Philadelphia, began litigating insurance cases after Hurricane Andrew in 1992, and often represents builders and developers in construction defect cases.

“I always tell people to buy a little more insurance than you think you need because the worst-case scenario is you bet against yourself and lost.”

Once you’ve secured the right coverage, walk through every room of your house or business and photograph your belongings, down to the floor coverings and appliances, then store the images in the cloud. And ask for a certified copy of your insurance policy.

“Oftentimes, the insurance company will have online portals to access coverage information,” says Susan Minamizono, a Denver attorney at Levin Sitcoff Waneka who has been counseling victims of the Marshall Fire that killed two and destroyed more than 6,000 acres over New Year’s in 2022. “All you really see are the bullet points, so it’s important to see the actual entire policy.”

Gilbert knows firsthand the importance of saving documents, photos and videos off-site: His own house burned down 22 years ago. “There are some things that I had done in advance that were really helpful, including keeping a copy of my insurance policy at my office so I was able to go and immediately get it. I did not do a good job of documenting all of our property.”

After a catastrophe, your homeowner’s premium will usually increase, Gilbert says, but if the hike is exorbitant, it may be time to decide whether to stay with your current provider or shop around.

Most people, attorneys agree, don’t need legal representation just to purchase or review an insurance policy. But if you own a business or high-end property, or if you’ve had prior bad experiences with disasters or insurance claims, you might want to hire an insurance lawyer before you’re in crisis mode.

When It Rains, It Pours: Filing a Claim

If a tornado, mudslide or other disaster has damaged or destroyed your home, you should notify your insurer right away, even if you’re not ready to file a detailed claim. This generates a claim number and starts the process. The same goes for reporting the situation to FEMA.

“Especially if there is a natural disaster that’s affecting so many people, you’re going to end up in a queue,” says Minamizono. “Being prompt about that is of foremost importance.”

Plus, some companies require claims within 30 days and may penalize policyholders for waiting too long. “Sometimes people are trying to be too smart for their own good, not notifying their insurance company because they don’t want their premiums to go up,” says Mallin. And despite the trauma and confusion that comes with a natural disaster, he adds, “It’s going to be hard to justify that you couldn’t notify your carrier within the first 30 days.”

Don’t say too much when the insurance representative contacts you; you don’t have to accept the first offer. Gilbert suggests requesting a visit from an adjuster and explaining that you’re still assessing the damage yourself.

Keep a written log of the calls, and refrain from sharing too much online. “A lot of times you’ve talked about how quickly the floodwaters were rising and maybe engaged in a little bit of hyperbole,” Gilbert says. “The insurance company will get all of that. They’ll use everything they can against you. The less you talk about it on social media or emails, the better off you’ll be.”

As long as it’s safe, take photos and video of the damage. Create a spreadsheet and start documenting your personal losses. Stay organized and keep receipts for anything you have to replace. “I’m talking everything from your kitchen pots and pans to your clothes to the lamp on the nightstand by your bed,” says Dollar. “All of that might be covered under your policy.”

If your house was completely destroyed, get a copy of the building plans from prior owners or the building inspector’s office.

Keep in mind that a claim can take several months, or even years, to finalize. Because of the sheer volume of claims after a widespread disaster, your insurance company will probably subcontract with adjusters from other states to handle the overload.

“Take a deep breath,” Marino says. “I’ve seen families survive terrible catastrophes and come together as a family. But I’ve also seen families just completely ripped asunder by living in terrible conditions post-hurricane and not getting any satisfaction. There’s a certain amount of patience that you need to just endure the process.”

If your small business was damaged, you might want to apply for a Small Business Administration (SBA) property recovery loan. FEMA may provide assistance if your home was uninsured or underinsured. And if you’ve been injured, contact an attorney.

“You may have a claim against somebody who didn’t have a building up to code,” Dollar says. “It may be worth investigating because it may allow you to get the medical care and treatment that is necessary.”

It’s a Twister: Claim Denials

Carriers can come up with a litany of reasons for denying claims or not paying enough after a natural disaster, attorneys say. ‘The policy doesn’t cover it.’ ‘The damage isn’t that bad.’ ‘It’s due to poor workmanship.’ ‘The damage already existed due to wear and tear.’

Since most insurance policies cover damages from wind, but not floodwaters, one of the most common battles takes place over which element destroyed your property. The cause can be difficult to prove.

During a powerful storm, for example, wind may damage parts of your home and allow rain to pour in from the side or above. Or, as was the case with Hurricane Katrina in 2005 when the estuaries surged and Lake Pontchartrain overflowed the levees, the water can rise from ground level. After Hurricane Sandy, as the insurance company debated which came first—the water or the wind—Gilbert went to bat for a client whose home on the Jersey Shore was almost completely demolished.

“That ended up being a multimillion-dollar question,” says Gilbert, who relied on wind and wave patterns, along with experts in meteorology and construction. “We put together a sufficiently persuasive case, so the insurer was willing to settle for a large percentage of the amount that we were claiming.”

Don’t panic if your claim is lowballed. You can try to negotiate with the insurance company yourself, hire a general contractor or building consultant to advocate for you, or file a complaint with the state’s insurance department.

After the Marshall Fire, Minamizono encouraged a pro bono client to file a complaint with the Colorado Division of Insurance. The insurance company increased the policy limits and covered the claim. “The client was extremely happy and they’re moving along, but that is a rare exception,” Minamizono says. “I’ve heard of folks who have been frustrated with their insurance companies and just simply walked away from the destroyed homes with no intention to rebuild.”

Before you get to that point, attorneys agree, you should seek legal advice. The same goes if your claim is denied, Minamizono says. An experienced attorney who specializes in insurance claims can negotiate—or, if that doesn’t work, litigate—on your behalf.

“Because we’ve been around the block, we know some of the arguments that are available to consumers that may expand coverage or provide coverage where coverage wasn’t provided beforehand,” Dollar says. “We know how to call them out.”

Lightning Strikes Twice: Scammers Calling

Most people who show up after a natural disaster wanting to help have good intentions, says Marino. After Hurricane Wilma hit in 2005, for example, he drove to Orlando, gathered as many bottles of water and jugs of gasoline as he could, and brought them back for his Miami coworkers. But beware of shysters who urge you to sign a contract for repairs, turn over your insurance claim to them, or assign them a portion of what you’ll be paid.

Likewise, exercise caution with unsolicited calls or emails from people asking for personal information. Get references and check out online reviews for anyone who appears out of nowhere, wanting to help you clean up or rebuild.

“Disasters bring out the best in people, but also the worst in people,” Gilbert says. “There are folks who make a living preying on victims of fires, floods and so forth. Be aware that if something sounds too good to be true, it probably is.”

Mother Nature’s Wrath: The 15 most expensive natural disasters

whatwhen & wherefatalitiesestimated damage (in billions)
Tohoku earthquake and tsunami2011 Japan19,759$360
Kobe earthquake1995 Japan6,434$197
Winter Storm Uri2021 North America246$196.5
Sichuan earthquake2008 China87,587$148
Hurricane Katrina2005 Gulf Coast1,836$125
Hurricane Harvey2017 Gulf Coast107$125
Asian monsoon2020 South Asia6,511$105
Hurricane Maria2017 Gulf Coast3,059$91.6
Hurricane Irma2017 Atlantic134$77.2
Hurricane Ida2021 Atlantic107$75.3
Black Summer2019-20 Australia479$70
Hurricane Sandy2012 Atlantic233$68.7
Sources: National Weather Service, National Centers for Environmental Information, AccuWeather, World Bank

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