Insurers take hit on hurricane deductible!

Sandy a Hurricane in name only......

A decision to not impose hurricane deductibles on homeowners who maintain coverage for their homes and dwellings impacted by Hurricane Sandy will likely be a costly one to insurers.

Typical 'Hurricane' deductibles are based on a percentage of the home value - usually between 2 to 5 percent. Without the Hurricane deductible, many homeowners impacted by the Superstorm will instead just face the standard policy deductible of between $500 and $1000.

Hurricane deductibles are allowed in New Jersey ONLY if the state is hit by a named hurricane with sustained wind speeds of more then 74 miles per hour. The National Weather Service downgraded Sandy to a post-tropical cyclone prior to it making landfall in Atlantic City.

Risk-modeling firms tallying the insured losses from the storm expect losses to be between $16 and $22 billion.

Claims preparation coverage….

How a ‘minor’ coverage endorsement can prevent a policyholder from incurring significant costs in developing a claim, presenting the claim to the insurer, gathering information requested by the insurer in response to the claim, and in negotiating the claim.

This frequently requires retention of various consultants, including construction consultants for building damage, accountants for time element coverages, and specialists when the claim involves complex or unique equipment or industry-specific requirements such as clean areas for computer or pharmaceutical manufacturers. Policyholders frequently hire public adjusters to oversee the claim preparation, presentation, and negotiation process, and the public adjusters frequently hire the necessary consultants. In other situations, a sophisticated policyholder will manage the claim process itself and directly retain consultants. The claim process is frequently referred to in the industry as the "adjustment" process, with both policyholder and insurer working toward an "amicable adjustment" of the claim.

Sophisticated policyholders frequently have coverage for claim preparation expenses in their policies, although most insurers specifically exclude public adjuster fees from that coverage. In a complicated claim, this additional coverage can be worth tens of thousands of dollars. One typical provision reads as follows.

This section covers the reasonable expenses incurred by the Assured for professional services such as auditors, accountants, architects, and engineers, except the Assured's own employees or public adjusters, which are required to present the loss which is covered by this Section.

As is typical in most policy provisions which provide for the insurer to pay claim preparation expense, public adjuster fees are specifically excluded.

Superstorm Sandy underlines need for Hospitals to have better Disaster Recovery Plans!

The equipment failures at NYU and nearby Bellevue Hospital, the nation’s oldest and one of its busiest, brought to the fore what emergency experts have warned for years. Despite bitter lessons from the recent past, U.S. hospitals are far from ready to protect patients when disaster strikes their facilities.

For most hospitals, “emergency preparedness” means being ready to treat a surge of patients from an earthquake or terror attack – disasters outside their walls. Even the federal program that coordinates hospitals’ preparedness at the Department of Health and Human Services has this mindset: it focuses on planning for mass fatalities and quickly reporting their number of available beds, not having redundant electrical systems.

For hospital administrators trying to keep their institutions in the black, disaster-resistant infrastructure is expensive and lacks the sex appeal of robotic surgery suites and proton-beam cancer therapy to attract patients.