By Michael Rice

The latest forecast for the 2009 Atlantic storm season predicts a slightly above-average storm season ahead. Philip J. Klotzbach and William M. Gray of Colorado State University predict 11 named storms including 5 hurricanes with 2 of those expected to reach Category 3 or higher (wind speeds above 110 mph). An “average” year includes 10 tropical storms with 6 hurricanes. The year 2005, during which Hurricane Katrina wreaked havoc on Louisiana and surrounding states, was the single worst season for storm activity in history with a total of 28 tropical storms and hurricanes. Armed with the predictions for the storm year ahead of us and the lessons of the worst season in recorded history behind us, the question of how to prepare for such potentially devastating storm activity and how to react once the damage has been done becomes of supreme importance throughout the insurance industry and should become of paramount interest among MiniCo’s client base.

Of course, one should take care of the well-known pre-storm board-up and seal-down procedures of property predicted by the weather services to be in the path of a coming serious storm. But there is likely enough time in this stage before the storm season is in full swing to do some other pre-storm analysis which is not usually included in your local news outlets’ recommendations for storm preparation. For example, it would be advisable to locate any and all insurance policies you own and ensure that they are kept in a place where storm activity would not likely affect them. You may want to make note of the names, addresses, phone numbers, and policy numbers for each of your policies and keep your list on your person so that you will be prepared to make immediate contact with your carriers once the storm activity has abated. In addition, it is also a good idea to keep contact numbers for the local authorities such as the police and sheriff, medical facilities, utilities, and emergency contacts.

You should also review with your insurance agent the coverages available on all of your policies, particularly property-related policies, to ensure that storm-related exposures are included in your coverages and that your policy reflects appropriate property values. Insurance companies are empowered to place moratoriums on new business or addendums to existing business during the period when a storm appears imminent. At those times, insurance carriers may issue instructions to agents to cease binding coverage and will not contemplate any exceptions. Again, this common practice underscores the necessity of securing accurate insurance coverages well in advance of storm season.

When the storms have subsided and you are on your property surveying the damages, your initial thoughts will likely include your insurance carrier. In the event that you have kept a record of the names, addresses, phone numbers, policy numbers and other identifying information concerning your various carriers, you will have the necessary information at your fingertips to make a few calls to report your claim to your insurance company. Please keep in mind that a claim can usually be reported to a carrier by either the agent or the insured, but each claim should only be reported once. Claim reporting information should include the following:

Your business name, address and phone number
All contact information for the insured and/or the insured’s representatives
Policy number
Date, time and location of the loss
A brief description of the damage (if multiple buildings are damaged,
specify which buildings are damaged with specific addresses for each)

Once you have reported the claim to your carrier, a claims representative will contact you to arrange for inspection of your property. While awaiting further action by your insurance carrier, there are a few things you may wish to consider:

Ensure the safety of yourself, your employees, passersby, customers and
the public at large. If your building is not stable, do not enter it or allow
anyone else to enter it.

Check for electrical power lines that may be down or damaged and gas
lines that may be severed or leaking. Notify the appropriate authorities
immediately.

Protect the property from further damage and protect any contents or other
personal property.

Begin emergency and/or temporary repairs as soon as practicable to
mitigate your damages. Most insurance companies will cover reasonable
and necessary emergency repairs which safeguard your property from
further loss, so keep detailed records of the amounts you spend and take
photos.

Keep any receipts for emergency repair work and an accurate record of
such work along with information to identify by whom the work was
performed.

Do not discard any item without checking with your claim representative
first.

Be prepared to provide your claim representative with copies of all
documents such as photographs showing damage, emergency repair
invoices, receipts, and inventories.

Take some photos.

While it is our continuing hope that no one sustains any damage, it appears that frequent and severe storms have become a way of life these days. With the guidelines provided above, we wish to assist property owners in the careful consideration, analysis and presentation of their insurance needs in the face of potentially catastrophic storm activity.

This brief article is not intended to provide specific legal analysis or advice, and should not be construed to apply to every potential situation involving insurance coverages and losses. For specific information and questions concerning this article and the information contained therein, please consult your insurance agent and/or your attorney.

Michael Rice is Manager of Claims for Phoenix-based MiniCo, Inc. MiniCo provides industry-leading specialty programs for self-storage businesses including property and casualty insurance and tenant insurance programs. For more information please visit www.minico.com or call 800-528-1056.