Tornadoes, Thunderstorms, Flooding and Fire:
First Response Tips
[Fri, April 22, 2011] Following the extraordinary weekend of tornadoes, thunderstorms and flooding, unfortunately
many homes and businesses suffered water damage. Water damage weather caused by rainstorm, broken pipe or leaking roof is
one of the most common and frequent property insurance claims my office handles everyday.
Below I've put together five "first response" suggestions of what I think are important steps to take in
case your property suffers water damage:
Eliminate the source of the water. If it is
a broken pipe, shut off the water supply and call a plumber to fix the break. Take all valuables out of the way immediately
to prevent further loss and unplug all electronics that are close to the flooded area. You have an obligation under the terms
of the policy to prevent further damage. Keep all the original parts that are replaced. Keep all repair contracts and receipts.
2) Contact a licensed and reputable Public
Adjuster to assess the damage and review your insurance policy. A competent adjuster will inspect the property in
detail and point out things you may not be aware of, suggest measures to prevent further damage, review your insurance policy,
discuss the claim process and take detailed photos of the loss.
Report the claim to you insurance company or agent. Be prepared to answer questions such as: When did it begin?
What was the cause? Have you done anything to the home? What are the damages? Be careful and thorough when answering.
You want to make certain that you give a true and complete picture. Describe all the damage details and don’t leave
anything out. If you have hired me as your Public Adjuster, let the insurance company know and give them my contact information.
I will then undertake the necessary steps of the claim process.
Document the loss. If you do not to hire a Public Adjuster, make sure to document the loss with photos
and supportive documentation. Do not throw away any damaged goods until after an inventory is taken. Make your own loss assessment
of items that have been damaged or are irreplaceable, things that may need to be fixed, restored or replaced, business interruption
5) Call a reputable remediation company immediately.
Point out areas of concern when the inspection is being performed. The remediation company will use multiple tools to help
with the dry out of your home or business. Please keep all receipts of any repair or maintenance work performed. It is your
obligation to reduce water damage or any further impairment. Mold can develop in days following water damage and mold coverage
in water damage claims is typically limited to $10,000. It is best to prevent mold from occurring. If you wait for your insurance
company adjuster to appear, it may be too late to do a proper remediation job. A professional remediation company should know
what they can do without jeopardizing the claim.
If you do not hire a
professional remediation company, do not remove material or dry out the property yourself unless your adjuster approves the
work beforehand. Otherwise, the adjuster and the insurance company may feel that the work was not required, not done properly
or may have caused further damage not covered by your policy. You could then have difficulty getting paid for the work you
did and for the cost of restoring the property.
For a no-obligation assessment
of your water damage or if you have any questions regarding the claim process, please call me at 954-742-8248 or email me
This Weekend's Devastating Storms, Tornadoes
[Mon, April 18, 2011] This weekend brought devastating weather to residents of the South. At least 45 people died
from tornadoes, thunderstorms, flooding, fire and hail across the southern United States over the weekend, and officials said
the death toll may rise as the cleanup continues.
Twisters hit 12 states:
Oklahoma, Kansas, Louisiana, Mississippi, Alabama, Missouri, Illinois, Georgia, South Carolina, North Carolina, Virginia and
Maryland. The reports are based on preliminary weather service data that the agency warns are often revised downward after
more complete information becomes available.
North Carolina accounted
for the bulk of casualties and property losses from the weekend weather, with 22 people killed and about 130 others injured.
Significant damage was reported in at least 26 counties and power outages affected more than 200,000 people.
The storms began in Oklahoma on Thursday, then moved through the South and hit the East
Coast by Saturday. There were 241 tornadoes reported, with 50 confirmed. It is the largest tornado outbreak since 2008.
While the many other parts of the country were suffering from storms and flooding, a
severe drought has led to unprecedented wildfires in the Southwest.
Governor Rick Perry has requested a Major Disaster Declaration for the entire state, as brush fires which have burned more
than 1.5 million areas continued on Monday. The fires have been whipped by 60-miles-per-hour wind gusts and fueled by brush
dried out by record low humidity.
It's been sad and disturbing to watch the latest news coverage
of this weekend's devastation in the South. Knowing fully well the difficulties and complications involved for homeowners
to rebuild their properties, deal with insurance companies and restore their homes and businesses - I urge policy holders
to call on a licensed Public Adjuster that will assist in the claim process and fight to receive the maximum allowed settlement.
No this is not an advertisement, but a sound and worthy advice.
witnessed many homeowners struggle financialy due to denied or underpaid insurance claims, please don't make the same mistake.
"If The Japan Event Occurred In
The United States?" -An Interesting Question Warrants A Detailed Answer
[Fri, April 8, 2011] Recently several of my blog entries have
been devoted to the Japan disaster and the insurance ramifications. An interesting question was subsequently emailed to me
by a reader which I will repost here along with my answer.
Question "Curious as to your interpretation - if the Japan event occurred
in the US, on a standard ISO property form, with earthquake coverage but not flood. If damage to insured was caused by nuclear
radiation from power plant, would nuclear exclusion apply, or is claim payable with earthquake as proximate cause?"
Answer: I would like to thank you very much for your interesting question and for your
participation in my blog. The recent disaster to strike Japan certainly saddens all of us as to the loss of life, human and
wildlife, the emotional and physical pain that the population of Japan would have to deal with for many years to come. In
addition, and as if that is not enough, many questions come to mind as to the overall financial loss in a global economy
still trying to recover. Should this disaster hit on U.S Soil what consequences would the Insurers face with most Policies
being written the way we are used to seeing?
In order to understand the nature of the financial
loss to buildings, properties and income, we have to first understand the process of the different perils that contributed
to the losses as those were incurred in Japan. Once we have a clear picture of the cause of the loss, we can then examine
the Policy Language offered by the Insurers and determine a hypothetical scenario should it happen on U.S soil. The earth
quake to strike Japan (reported 9.1 on Richter scale), one of the most powerful quakes ever recorded, has caused much damage
to buildings, structures, roadways, businesses and infrastructures. One in particular, the Fukushima Nuclear Power-Plant.
The March 11, 2011 Tōhoku earthquake resulted in maximum horizontal ground accelerations
of 0.21 g (2.10 m/s2) to 0.28 (2.77 m/s2) at the plant site, which is well below the design basis. All four units were automatically
shut down immediately after the earthquake, according to NUCLEAR ENGINEERING INTERNATIONAL, and the diesel engines were started
to power the reactor cooling. TEPCO estimated that the tsunami that followed the earthquake and inundated the plant was 14
meters high which is more than twice the designed height. This flooded the pump rooms used for the essential service water
system transferring heat to the sea, the ultimate heat sink of the reactors. While the cooling system for unit 3 was undamaged,
the other reactors were affected. The cooling systems remained operational, but heated up due to the lack of a heat sink.
The high pressure coolant injection (HPCI) system (powered by reactor steam) was used as additional cooling. On March 12,
the cooling system for three reactors (numbers 1, 2 and 4) at the torus had topped 100 °C between 05:30 and 06:10 JST
rendering all cooling systems (depending on temperature difference between the torus and the reactor) ineffective.
The coolant systems in the pump room were repaired and activated in Units 1, 2 and 4 in the days following the emergency
shutdown after cooling could recommence Coolant temperatures below 100 °C (cold shutdown) were reached in reactor 2 about
34 hours after the emergency shut down SCRAM Reactors 1 and 3 followed at 1:24 and 3:52 on March 14 and Reactor 4 at 7:00
on March 15.The loss of cooling water at reactors 1, 2 and 4 was classified a level 3 on the International Nuclear Event Scale
(serious incident) by Japanese authorities as of March 18. Officials made preparations for release of pressure from the plant
on March 12. As of March 20, however, no pressure release had been reported.
An evacuation order
was issued to people living within 3 kilometers (1.9 mi) of the plant, subsequently expanded to 10 km (6.2 mi). Air traffic
was restricted in a 10 km (6.2 mi) radius around the plant, according to a NOTAM these zones were superseded by the 20 km
evacuation and 30 km no-fly zones around Fukushima I on March 12 and 15, respectively. TEPCO announced that a worker who had
been seriously injured by the earthquake and trapped in the crane operating console of the exhaust stack was transported to
the ground at 5:13 p.m. and confirmed dead at 5:17 p.m. Smoke was escaping from one of the buildings on 30 March 2011. It
was emitted from equipment which supplies electrical power to a motor pump that collects outdoor water and stopped after workers
disconnected the motor.
The introduction of the nuclear exclusion on coverage forms came in 1957, the same year in which
the Price-Anderson Act became law; this law required evidence of financial responsibility for all privately owned nuclear
reactors. Due to the possible catastrophic potential of nuclear contamination, the financial responsibility requirement had
to be met economically through the use of insurance. However, insurers were not willing to offer such insurance coverage on
standard lines policies and so; the nuclear exclusion clause was attached to virtually all fire policies by endorsement or
as part of some other form. The language of the clause was as follows:
Loss by nuclear reaction
or nuclear radiation or radioactive contamination, all whether controlled or no controlled, or due to any act or condition
incident to any of the foregoing, is not insured against by this policy, whether such loss be direct or indirect, proximate
or remote, or be in whole or in part caused by, contributed to, or aggravated by any of the perils insured against by this
policy; and nuclear reaction or nuclear radiation or radioactive contamination, all whether controlled or uncontrolled, is
not considered "explosion" or "smoke." In addition to this exclusion, the policies discussed and clarified
the relationship between the peril of fire and nuclear reaction.
The discussion centered on a
particular clause that was worded as follows:
The word "fire" in this policy or endorsements
attached hereto is not intended to and does not embrace nuclear reaction or nuclear radiation or radioactive contamination,
all whether controlled or uncontrolled, and loss by nuclear reaction or nuclear radiation or radioactive contamination is
not intended to be and is not insured against by this policy or said endorsements, whether such loss be direct or indirect,
proximate or remote, or be in whole or in part caused by, contributed to, or aggravated by "fire" or any other perils
insured against by this policy or said endorsements; however, subject to the foregoing and all provisions of this policy,
direct loss by "fire" resulting from nuclear reaction or nuclear radiation or radioactive contamination is insured
against by this policy.
The language of the clauses dealing with nuclear contamination or reaction,
then, showed an intent to exclude practically all loss, whether direct or indirect, except that by fire resulting from nuclear
reaction or radiation. However, in the one major test to date in the United States, the Three Mile Island incident that occurred
in April 1979, several insurance companies surveyed by The National Underwriter took the position that the nuclear exclusion
clause, at least in the homeowners policy, does not apply if the home is vandalized or burglarized after it has been evacuated
due to the threat of nuclear contamination. It was felt that since "the vandalism and theft are not a direct result of
any contamination, the nuclear exclusion clause does not apply." Furthermore, the exclusion itself stated that nuclear
reaction or contamination is not explosion or smoke, thereby implying that losses due to such perils are covered even if caused
by a nuclear reaction. Thus, the exclusion was not as omnibus in its application as perhaps was originally planned.
However, just as the early fire policies have evolved into the current property coverage forms, so has the
nuclear exclusion clause been revised. Several property insurance forms and the nuclear exclusion clauses on those forms are
The Nuclear Clause and Coverage Forms
forms contain a nuclear hazard exclusion that refers to the conditions section of the coverage form. The nuclear hazard clause
in the conditions section states that the policy does not apply to loss caused directly or indirectly by nuclear hazard, except
that direct loss by fire resulting from the nuclear hazard is covered. Nuclear hazard is defined as "any nuclear reaction,
radiation, or radioactive contamination whether controlled or uncontrolled or however caused, or any consequence of any of
these." Loss caused by the nuclear hazard will not be considered loss caused by fire, explosion, or smoke, whether these
perils are specifically named in or are otherwise included within the perils insured against section of the policy.
The nuclear hazard exclusion in the farm property coverage form is somewhat simpler and more definite.
This exclusion states that the insurer will not pay for loss or damage caused directly or indirectly by nuclear reaction,
radiation, or radioactive contamination however caused. The form does, however, keep with tradition and continues the exception
for loss or damage by fire that results from a nuclear reaction.
The commercial property
policy has the causes of loss and the exclusions listed on a separate form, depending on what causes of loss the
insured wants covered. Regardless of whether the insurance is under the basic form, the broad form, or the special form, loss
or damage caused directly or indirectly by nuclear reaction or contamination is excluded; as with other property forms, loss
or damage by a resulting fire is insured. All three forms also have a separate clause that states that the insurer will not
defend any claims or lawsuits or pay for any expenses resulting from nuclear reaction, radiation, or contamination. This clause
seems to belong on a liability form, but it simply reinforces the insurer's intent not to pay any damages that have anything
to do with a nuclear hazard.
The nuclear hazard exclusion on the builders risk coverage
form is handled with the same wording as in the preceding paragraph.
hazard exclusion on the business owner’s policy has the same wording as the other commercial property coverage
forms, but the separate clause concerning the refusal to pay for claims or defense is absent.
equipment breakdown form contains slightly different nuclear hazard exclusion in that the exception to the exclusion
for damage by resulting fire is not part of the clause. The nuclear hazard exclusion clause refers only to loss caused by
or resulting from nuclear reaction, radiation, or contamination however caused.
of the inland marine forms have a nuclear hazard exclusion that precludes coverage for a loss caused directly or
indirectly by any weapon employing atomic fission or fusion, or by a nuclear reaction, radiation, or contamination from any
other cause; direct loss caused by a resulting fire would be covered if the fire is insured against under the coverage form.
The mail coverage form is different in that, while damage from atomic weapons
is excluded, the nuclear hazard as such is not mentioned in the form.
The personal automobile
physical damage coverage excludes loss due to or as a consequence of radioactive contamination. Loss caused by the discharge
of any nuclear weapon is also excluded even if the discharge is accidental.
business auto coverage form, physical damage coverage section, the wording of the nuclear exclusion is a bit different.
The exclusion on this form applies to the explosion of any weapon employing atomic fission or fusion; it also applies to nuclear
reaction, radiation, or radioactive contamination, however caused. The garage coverage form and the truckers form also have
this wording in their respective physical damage sections.
The nuclear exclusion on
the crime forms is simple and to the point, perhaps owing to the fact that a crime loss caused by nuclear or radioactive
contamination is not exactly a common occurrence. The exclusion on the various crime forms states that the coverage will not
apply to "loss or damage resulting from nuclear reaction or radiation or radioactive contamination, however caused";
a rather all-encompassing and generalized phrase, but a phrase that, in all probability, would not be the subject of many
legal disputes due to such a minor chance of a crime claim arising from a nuclear loss.
it should be noted that for information on the nuclear exclusion found in liability forms, see Nuclear Energy Liability Exclusion.
The commercial property causes of loss forms have an interesting clause dealing
with legal liability coverage and nuclear hazard. Legal liability coverage is, of course, an agreement whereby the insurer
agrees to pay those sums that the named insured becomes legally obligated to pay as damages because of a direct physical loss
or damage (including loss of use) to covered property; the loss has to be accidental and arise out of any covered cause of
loss. Though this pertains to legal liability, the coverage is offered under a property form. In any case, the causes of loss
forms state that the nuclear hazard exclusion does not apply to the legal liability insurance that the insured has purchased.
One might then think that, for example, if a tenant causes damage to his landlord's building due to nuclear or radioactive
contamination (however caused), and that tenant is held legally liable for the damages, the legal liability coverage form
would respond and pay those damages for which the insured is liable. Not so. The clause goes on to state that the insurer
will not defend any claim or suit, or pay any damages or expenses resulting from nuclear reaction, radiation, or contamination,
however caused. What this clause does, in effect, is to exclude the insured's legal liability coverage for damage due to the
nuclear hazard. However, this clause does allow legal liability coverage for any damage done by a resultant fire. So, if the
insured tenant is legally liable for damage done to his landlord's building as a result of nuclear contamination and a fire
that ensued from that contamination, the cause of loss form would respond to the fire damage (fire legal liability) but not
to the nuclear contamination damage.
Relation to the War Exclusion
is important to note that there is no necessary relationship between the various war exclusion and governmental action clauses
on the one hand and the nuclear clauses on the other. They are entirely separate things. The language in the older fire forms
concerning discharge of a weapon of war employing nuclear fission and the like.—which was part of the war exclusion
clause—was for some years the only direct reference to nuclear energy. Today, however, the nuclear clause stands on
its own and the war exclusion clause speaks of war in general and does not concern itself with the discharge of nuclear fission
When analyzing coverage
the following steps have to be performed
- Cause and origin investigation
- The cause and origin of the loss would trigger the coverage insured against (or excluded) of a specific peril. Once a determination
has been made to the cause of loss, the Insurer can interpret the Policy Language respective to the event. In this case (the
Japan Disaster) we have three different events associated with the disaster. An Earthquake(1) that triggered a Tsunami (2)
generally described as "flood" in most policies, and as a result, damaged a nuclear Power Plant which released Nuclear
- Earth quake - In the U.S, most ISO Policies do not exclude
damage caused by Earthquake. based on the above, all damage caused by the Earthquake should be covered under most Policies
- "Flood" - Basic Homeowners Policies, Commercial Policies, do not generally cover
"flood". Flood insurance is mandated by the Federal Government under the NFIP program and is serviced with different
Insurance carriers. Although "flood" coverage is offered, not too many consumers tend to purchase it. This usually
stems from erroneous evaluations of risk or simple neglect of agents and brokers not offering the same. In the event and
insured carries "flood" Insurance, in most cases the policies are limited to $250,000.00 which in many cases will
not be enough to cover repair or replacement costs as a result of a "Tsunami"
Contamination - Under the Proximate cause provision, the original loss - the Earth quake, triggered the Tsunami which
damaged the nuclear Plant. the "ensuing loss" the Nuclear contamination, would cause damage which is specifically
excluded in the following manner: "Loss by nuclear reaction or nuclear radiation or radioactive contamination, all
whether controlled or no controlled, or due to any act or condition incident to any of the foregoing, is not insured against
by this policy, whether such loss be direct or indirect, proximate or remote, or be in whole or in part caused by,
contributed to, or aggravated by any of the perils insured against by this policy; and nuclear reaction or nuclear
radiation or radioactive contamination, all whether controlled or uncontrolled, is not considered "explosion" or
"smoke." However, should the nuclear event cause or contribute to a fire in the insured property, the damage
from that fire will be covered. In other words, if the building is contaminated by nuclear waste, this damage is not covered,
however, if a resulting fire destroys the building, this damage is covered.
- While adjusting
such loss, the first damage the building sustains from the Earth Quake will prevail over any other over lapping ensuing losses.
In other words, if a wall collapses during the Earth Quake, and then gets water damaged from the Tsunami, and finally gets
contaminated by nuclear activity, the insurer must pay the claim first on the adjustment of the collapse, then add the water
damage created by the flood. Finally, the nuclear contamination portion of the damage not yet paid for will be excluded.
Here is an example:
House with HO-3 Policy with a $300,000.00 limit of insurance under
Coverage A is located in the Earth Quake Zone and sustains damage in the amount of $150,000.00. The Tsunami adds $50,000.00
damage. The Nuclear pollution causes the structure to be condemned. Building Insurer will pay the first $150,000.00. The
Flood Insurance Company will pay the $50,000.00 adjuster flood loss. The additional $100,000.00 will be excluded. Other
coverage’s such as Law and ordinance, ALE, Contents should also be adjusted the same way.