Maximizing Insurance Coverage.pdf - BLS-Sandy-Response

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Maximizing Insurance Coverage.pdf - BLS-Sandy-Response Powered By Docstoc

   How to Maximize Your I nsurance Coverage and Governmental Assistance
                By Adam Leitman Bailey, Colin Kaufman and Leni Morrison Cummins

 Q: How do I know if my home has flood or insurance coverage? And what type of
 insurance will cover damages from hurricane Sandy?

 A: Because lenders mandate that homeowners in flood zones obtain flood insurance as a
 prerequisite to lending, most homeowners in flood zones will have flood insurance protection.
 There are three general types of flood insurance policies: the Dwelling Policy (includes condo
 unit owners), the General Property Policy and the Residential Condominium Building
 Association Policy. The specifics of flood insurance coverage can be reviewed at the FEMA

 In addition to flood insurance, you may also have coverage under your general liability and
 umbrella polices for damage caused by wind and rain. All insurance policy coverage is
 contractual. That means that your specific policy may contain coverages, exclusions or
 deductibles that are not discussed here. You, your broker and your lawyer should review your
 coverages immediately so that a timely and correct report may be made to your carrier.

 The most common homeowners policies issued in New York are the HO-1, HO-2, HO-3, HO-5
 and HO-8. There are also HO-4 (Tenant Policies) and HO-6 (Unit Owner Policies). These
 policies do not cover flood damage.

 The HO-1 and HO-2 p
                                                                     The HO-1 policy is
 unusual in New York because of its narrow coverage; normally one of those named perils is
 windstorm coverage (but not flooding). The HO-8 policy is also unusual in New York it
 provides for actual cash value coverage (explained below).

 The HO-
 insures against loss to the home or contents for all risks except those that are specifically
 excluded (flood is normally excluded). The HO-3 generally excludes coverage for, among other
 things, flooding, sewer backup, power failure and general weather conditions. The HO-5
 includes the coverage of HO-3 with greater all-risk coverage for personal property, subject to
 specific exclusions.

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 120 Broadway, 17th Floor, New York, NY 10271 tel: (212) 825-­0365 fax: (212) 825-­0999
             14 South Main Street, New City, NY 10956 tel: (845) 639-­3099

 All policies contain deductibles, amounts for which the insured will have to be responsible.
 Policies can be written such that the insurance

 initial value of the property, less depreciation. ACV payment can never exceed the initial value
 of the property or replacement cost. Replacement cost is the cost to replace the item with one of
 similar value without deduction for depreciation. Damage to your property may be subject to a
                                                                                          d New
 Jersey have indicated that because Sandy did not make landfall as a hurricane, that deductible
 will not apply in their states.

 The dwelling and other structures on the property are generally paid for at replacement cost, so
 long as at least 80% of the value of the property is insured; if not, the property owner will be

 owners cannot insure in excess of 100% of their property (to reduce the risk of fraud).

 Generally, damage to the property must be a direct result of the insured perils not merely a
 proximate one. Thus, wind damage to the structure will be compensable, if covered, but wind-
 driven water will not.

 Q: When and how do I submit claims to insurance:

 A: Time is of the essence. Every homeowners insurance policy, whether it be a general liability
 or umbrella policy for a building or community, or an individual unit owner policy, conditions
 the payment of claims on the receipt of timely notice of claim. What does this mean? If you do
 not provide your insurance company with notice of your claim as soon as reasonably practicable
 after the damage occurs, the insurance company may seek to deny coverage for your claim
 regardless of whether there would otherwise be coverage.

 Therefore, boards and property owners should send claims to all of their current insurance
 carriers in writing mailed, with return receipt requested immediately. Boards should also urge
 residents within their communities to do the same. Claims should include a general description

 damage including, but not limited to (1) cracks in the façade, (2) falling windows, (3) water
 infiltration due to missing windows

 Q: I s there any public assistance or funding available?

  A: Yes, there are several programs that can assist you which we have listed below.
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 120 Broadway, 17th Floor, New York, NY 10271 tel: (212) 825-­0365 fax: (212) 825-­0999
             14 South Main Street, New City, NY 10956 tel: (845) 639-­3099

  FEMA Aid:
     Disaster assistance is financial or direct assistance to individuals and families whose
     property has been damaged or destroyed as a result of a federally-declared disaster, and
     whose losses are not covered by insurance. It is meant to help you with critical expenses
     that cannot be covered in other ways.
     How to apply: Apply Online at
Apply via a smartphone at
Or apply by Phone by calling (800) 621-3362 or TTY (800) 462-7585.
     U.S. Small Business Administration (SBA) Loans
         o Assistance particularly for homeowners associations including coops and condos:
         o Homeowners can apply for a real property loan for up to $200,000 to repair or
             replace their primary residence to its pre-disaster condition.
         o Homeowners or renters can apply for a personal property loan for up to $40,000
             to help repair or replace personal property, such as clothing, furniture,
             automobiles, etc., lost in the disaster.

  HUD Disaster Resources:  
         o Mortgage Assistance from HUD's Federal Housing Administration (FHA): FHA
             activates a mortgagee letter making a variety of insured loan programs available
             for disaster victims and putting into play use of special loan servicing and
             underwriting requirements
                     See also
         o Forebearance from Ginnie Mae
         o Reprogramming of Public Housing Funds
         o Disaster Housing Assistance

  NYS Division of Homeland Security and Emergency Services (DHSES)
      Helpful links are found here -

  New York City Business Assistance Programs -
        Loans for small to mid-sized business that have experienced business interruptions
           o Emergency loans capped at $25,000. Call 311 and ask for NYC Business
               Emergency Loan.
        Economic benefits for mid-to-large sized benefits
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 120 Broadway, 17th Floor, New York, NY 10271 tel: (212) 825-­0365 fax: (212) 825-­0999
             14 South Main Street, New City, NY 10956 tel: (845) 639-­3099

            o An emergency letter will be available, allowing businesses to avoid paying New
               York State and New York City sales tax on material purchases for rebuilding.
               Reconstruction programs exceeding $500,000 may qualify. Contact Shin Mitsugi
        For displaced businesses
            o NYC will make temporary space available at the Brooklyn Army Terminal free of
               charge. Contact Doug Roberts at for further information on
               this program.

  FEMA assistance only applies to losses not covered by any other existing insurance. If any
  insurance applies, to get FEMA you would have to be rejected by that insurance. Thus, you
  need to make application to any potentially covering insurance carrier and have documentation
  of their refusal of coverage. Also, FEMA does not restore the damaged property to the

 Q: Can I make a warranty claim?

 A: In New York, under the General Business Law, purchasers of new homes from a housing
 merchant have protections against defects in workmanship, materials and design, unless
 excluded by a contract offering a limited warranty. In order to make a claim under this section of
 the law, the homeowner must give written notice to the seller of the breach and commence an
 action, if needed, within very strict time limits.

 To the extent damage relates to a portion of your building or homes that is under warranty,
 boards or property owners should send a warranty claim referencing the specific warranty to the
 warrantor as soon as possible by writing mailed, return receipt requested.

 Q: How do I document the damages so insurance companies will cover my claim?

    1. Take video and still photography of all damage with a newspaper (the New York Post
       and the Daily News only) dated the day that the still and video photography is taken.
       Write down details of the pictured damage.

    2. Maintain a log of damages. This can be as simple as a handwritten list, or can be in the
       form of an excel chart (if you have access to power/computer).

    3. Keep receipts and documentation of all expenses incurred during the clean up process.

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 120 Broadway, 17th Floor, New York, NY 10271 tel: (212) 825-­0365 fax: (212) 825-­0999
             14 South Main Street, New City, NY 10956 tel: (845) 639-­3099

    4. For boards of multifamily developments, please invite residents to provide you with their
       damage logs or if possible post their damage logs on the community google or yahoo
       group page.

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 120 Broadway, 17th Floor, New York, NY 10271 tel: (212) 825-­0365 fax: (212) 825-­0999
             14 South Main Street, New City, NY 10956 tel: (845) 639-­3099

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