Facts & News Archives

When dealing with water damage, it’s crucial to understand the severity and potential risks involved. Water loss is classified by contamination level. Its class denotes damage extent and evaporation rate. As your trusted public adjusters, we provide crucial information about water loss categories and classes, guiding you through challenges.

Water Loss Categories:

Category 1:

Category 1 water loss is considered the least severe, as it originates from a sanitary water source with minimal health risks if ingested or inhaled. Common examples include broken water supply lines, sink or tub overflows with no contaminants, melting ice, and broken toilet tanks.

Category 2:

Category 2 water loss involves water with contamination, posing a potential risk of illness upon contact or consumption. This type of water may harbor unsafe levels of microorganisms, nutrients, and organic or inorganic matter. For instance, overflows from washing machines, discharge from dishwashers, or toilet bowl overflows can fall into this category.

Category 3:

The most severe category, category 3 water loss, contains highly contaminated water with pathogenic, toxigenic, or harmful agents, such as sewage or floodwater from external sources. It can be caused by events like tropical storms or weather-related disasters.

Water Loss Classes:

Class 1:

As for Class 1 water losses, they impact a limited part of a room or area, or involve larger spaces with minimal moisture absorption. Moreover, this class presents the least amount of water, absorption, and evaporation.

Class 2:

Category 2 water loss, also known as gray water, involves water containing contamination, posing potential health risks. It may harbor unsafe levels of microorganisms, nutrients, and organic or inorganic matter. Examples of this type include overflows from washing machines, discharge from dishwashers or washing machines, and overflows from toilet bowls.

Class 3:

In a class 3 water loss, water may have come from overhead, resulting in saturated ceilings, walls, carpets, insulation, and sub-flooring throughout the entire area. Consequently, this class involves the greatest amount of water.

Class 4:

Class 4 water losses occur when materials with low permeance porosity, such as hardwood, plaster, brick, and concrete, are affected. These cases often have deep pockets of saturation, necessitating longer drying times and specialized methods.

Jimmy Marlow from Action News Jax reported in Jacksonville, Florida that “Regency Square Mall, once a bustling retail destination in the 90s and early 2000s, has now fallen into a state of disrepair. The mall’s roof has caved in, leading to extensive water damage and the spread of mold, raising concerns for both tenants and the local community.” Being proactive when it comes to water damage is imperative. Understanding the categories and classes of water loss is essential for assessing the severity of damage and implementing the appropriate recovery measures. As your premier public adjusting firm, we are here to support you through the challenges of water damage, providing expert guidance and compassionate assistance every step of the way. Together, we’ll navigate the complexities of water loss and ensure we restore your property to its fullest potential.

In the grand theater of meteorological events, two powerful weather phenomena play starring roles: tornadoes and downbursts. Though they both may seem like formidable players causing extensive damage, they are distinct in their formation, the type of winds they produce, and the nature of destruction they cause. This blog will dive into the world of tornadoes and downbursts, with special emphasis on macrobursts and microbursts, and will guide you on how to ensure your property is adequately covered by insurance for such events.

Tornadoes vs. Downbursts: The Basics

Tornado Formation and Wind Type

According to National Oceanic and Atmospheric Administration’s National Severe Storms Laboratory (NOAA NSSL), “A tornado is a narrow, violently rotating column of air that extends from a thunderstorm to the ground.” The formation of a tornado, also known as tornadogenesis, is a complex process that involves varying wind speeds and directions, change in wind speed and direction with altitude (wind shear), high humidity, and instability in the lower atmosphere.

Tornadoes produce what is known as rotational winds. These are winds that move in a circular pattern around a center point, much like water going down a drain.

Downburst Formation and Wind Type

On the other hand, a downburst is a strong downward current of air from a thunderstorm that hits the ground and spreads out in all directions. There are two types of downbursts: macrobursts and microbursts. A macroburst is a powerful storm with a diameter exceeding 2.5 miles, lasting 5 to 30 minutes. In contrast, a microburst is more concentrated, affecting an area under 2.5 miles wide, lasting around 5 minutes.

Unlike tornadoes, downbursts produce straight-line winds. These winds flow in a more uniform direction, spreading radially once they hit the ground.

The Devastation: Tornado vs. Downburst Damage

The type of wind involved greatly influences the pattern of damage that these events cause. Tornado damage is often identifiable by a distinct path of destruction due to its rotational winds, leaving damage in a somewhat narrow and long trail.

In contrast, the damage from a downburst is typically more “divergent” due to the straight-line winds. The destruction radiates outwards from a central point where the wind initially strikes the ground, often creating a radial or fan-shaped pattern of damage.

Insurance Claims: Navigating the Storm After the Storm

The aftermath of these severe weather events often leads to significant property loss, making insurance claims a necessary, albeit daunting, process. Here are key factors to consider when dealing with insurance for tornado and downburst damages.

Coverage for Tornado Damage

Standard homeowners’ insurance policies typically cover tornado damage. It usually falls under the “windstorm” or “hail” peril covered in your policy. However, it’s essential to review your policy’s specific terms and limits.

In the event of a tornado, you’ll want to document all damage extensively, take photographs, and compile a detailed inventory of damaged items. This information will support your claim.

Coverage for Downburst Damage

Damage from downbursts, including both macrobursts and microbursts, is generally covered under the wind damage provision of your homeowners’ insurance policy. As with tornadoes, it’s crucial to document all damage thoroughly, providing your insurance company with a detailed account of the loss.

Getting Adequate Coverage

While basic homeowners’ insurance usually covers tornado and downburst damages, there are certain scenarios where additional coverage may be needed. For instance, if you live in a tornado-prone area, consider getting a separate, specific tornado insurance policy.

Your standard policy might not cover damage due to flooding following a downburst or a tornado. So, consider adding a flood insurance policy to your existing coverage. Additionally, ensure your policy includes a provision for living expenses in case your home becomes uninhabitable due to storm damage.

Conclusion

Tornadoes and downbursts, including macrobursts and microbursts, are powerful weather phenomena with distinct formations, wind types, and patterns of damage. Securing proper insurance for these situations brings peace of mind amid unpredictable weather. Regularly assess your policies for the right coverage and disaster-response know-how.

Navigating through endorsements in commercial property insurance can feel like a daunting task. But these critical elements of your insurance policy can significantly shape the protection afforded to your business. In this guide, we’ll delve into what endorsements are, breaking them down into types and sorting them to help you understand their effect on your policy. Whether you’re an experienced business owner or just starting out, this information holds the key to protecting your assets.

What Are Property Insurance Endorsements?

An endorsement alters an insurance policy’s standard terms and conditions. By adding, deleting, modifying, or clarifying coverage, it creates a tailor-made policy for the policyholder. Let’s explore different types of endorsements, focusing on how they may or may not favor you as a policyholder.

Endorsements That Favor the Policyholder:

1. Additional Coverage Endorsement: This endorsement extends protection to risks not originally covered in the policy. It can be vital for businesses with unique or specific risks that aren’t included in standard coverage. By tailoring the policy to the business’s exact needs, it ensures that unexpected incidents won’t leave the business vulnerable.
2. Broad Form Property Damage Endorsement: Enhancing property damage coverage, this endorsement provides more comprehensive protection against a wider range of property damage. It’s particularly useful for businesses with various properties or valuable assets. Knowing that a broader set of damages is covered can provide peace of mind and financial security.
3. Waiver of Subrogation: This endorsement protects the policyholder by waiving the insurance carrier’s right to recover claims from third parties. It often facilitates business relationships by eliminating potential conflicts over liability and claim recovery. Having this waiver can simplify agreements with contractors, suppliers, or partners.
4. Debris Removal Endorsement: Covering the costs for debris clean-up after an insured loss, this endorsement ensures that you won’t face unexpected out-of-pocket expenses following a disaster. It is particularly beneficial for properties that may be at risk of events leading to significant debris, such as a hurricane. Removing debris can be costly and time-consuming, and this endorsement takes that burden off the policyholder.
5. Business Interruption Endorsement: This endorsement protects against lost income during temporary closures caused by covered events. It can cover not only the lost revenue but also the ongoing operating expenses, helping businesses stay afloat during challenging times. Every business faces potential interruptions, and this endorsement offers a valuable safety net. Learn more about business interruption claims here.

Endorsements That May Not Favor the Policyholder:

1. Exclusion Endorsements: These endorsements outline specific risks that are not included in your policy. They may limit the coverage considerably based on the business’s location, operations, or other factors. Understanding what is excluded is crucial to avoid gaps in protection and unexpected claim denials.
2. Deductible Endorsement: Increasing the deductible, this endorsement raises the out-of-pocket costs before coverage kicks in. While it might lower the premium, it means potentially higher expenses at the time of a claim. Assessing the affordability of the deductible in case of loss is essential when considering this endorsement.
3. Contamination Exclusion: Limiting coverage for contamination-related losses, this endorsement can be a significant drawback for businesses handling chemicals or waste materials. It can leave a company exposed to substantial financial risks if contamination occurs. Understanding and mitigating this exclusion is essential for relevant industries.
4. Nuclear Incident Exclusion: This exclusion denies coverage for damages resulting from nuclear incidents. While it might seem irrelevant for most businesses, those near nuclear facilities or involved in certain industries must be aware of this limitation. Considering alternative risk management strategies might be necessary.
5. Terrorism Exclusion: Excluding coverage for terrorism-related damages, this endorsement may be significant for businesses in high-risk areas or industries. It’s essential to understand how this exclusion is defined within the policy and to consider whether additional terrorism coverage is necessary.
6. Cosmetic Exclusion: Excluding coverage for cosmetic damages that does not affect functionality, this endorsement may lead to denied claims for superficial damages. For businesses where appearance is vital, such as retail or hospitality, understanding this exclusion’s impact is crucial.
7. ACV Roof Endorsement: Providing Actual Cash Value (ACV) for the roof, this endorsement considers depreciation, which may lead to lower claim payouts. It could result in significant out-of-pocket costs if the roof needs replacement. Businesses must weigh this endorsement’s cost-saving benefits against potential future expenses. Learn more about RCV vs ACV policies here.

Clarifying Endorsements:

Some endorsements neither add nor subtract coverage but provide further clarification. These are essential for avoiding misunderstandings between the insurer and the insured. By defining terms, conditions, or procedures more explicitly, they reduce ambiguity and foster a clearer understanding of the policy.

The Importance of Knowing Your Endorsements:

Understanding the endorsements on your policy is crucial, especially when it comes to filing a claim. They define what is and isn’t covered and at what value. Ignorance of an exclusion or limitation can lead to unpleasant surprises during the claim process. For example, a Cosmetic Exclusion means that any claim for superficial damages that does not directly impact the property’s function might be denied. An ACV Roof Endorsement considers the roof’s age and wear, which could significantly reduce the amount you receive in a claim. Knowing these details helps you manage risks and provides for a smoother claim process.

Commercial property insurance endorsements are a varied aspect of your coverage. From those that favor the policyholder to those that may limit coverage, and even those that simply clarify terms, understanding endorsements is key to fully grasping your insurance protection. Moreover, recognizing the aspects of each endorsement can help you file claims with confidence and navigate the complex world of commercial insurance with ease. Partnering with an insurance professional ensures your policy’s endorsements align with your business’s unique risks and needs, creating robust and responsive coverage.

Understanding your insurance policy can be daunting, especially when faced with complex terms like “recoverable depreciation.” For numerous policyholders, this idea might seem unfamiliar. Yet, it’s crucial for both Replacement Cost Value (RCV) and Actual Cash Value (ACV) policies. In this guide, we’ll cover recoverable depreciation, differentiate RCV from ACV, clarify payment timing for recoverable depreciation, and share key info every policyholder should grasp about it.

What is Recoverable Depreciation?

This term is often overlooked but vital in the insurance claim process. To fully understand this concept, let’s break down what it entails: Recoverable Depreciation refers to the difference between the Replacement Cost Value and the Actual Cash Value of a damaged item. The policyholder can “recover” the insurance carrier’s withheld amount after documenting repairs. Certain policies don’t pay non-recoverable depreciation to the policyholder. Understanding whether your policy includes recoverable or non-recoverable depreciation is vital when filing a claim.

Calculating Recoverable Depreciation

Understanding how to calculate Recoverable Depreciation can help policyholders gain insight into the amount they can reclaim.

1. Determine the Replacement Cost Value (RCV): This is the total cost to replace or restore the damage with similar quality and type. A licensed and experienced public adjuster, estimator or contractor are all professionals that can determine the replacement cost value of damage to your property based on current costs of labor and materials.
2. Find the Recoverable Depreciation: The Recoverable Depreciation is the difference between the RCV and ACV. Traditionally, depreciation is calculated based on the item or the product’s useful life. For example, say you purchase a washer & dryer for $2,100 with an estimated useful life of 15 years. By dividing the total cost at the time of purchase ($2,100) by the estimated lifespan (15 years), it would determine the washer & dryer to depreciate by $140 each year. Therefore, if after 5 years the laundry units ACV would be $1,400 (5 years x $140 = $700 in depreciation over 5 years. The initial purchase price $2,100 minus the $700 in depreciation = $1,400). However, this is just a very general example. When it comes to property damage and filing an insurance claim, each insurance carrier, circumstance and loss are unique and the calculation of depreciation may vary.
3. Calculate the Actual Cash Value (ACV): This involves determining the RCV and then subtracting the depreciation based on age, wear and tear, or other factors. Thus, Actual Cash Value (ACV) = Replacement Cost Value (RCV) – Depreciation.

Impact of Inflation

Inflation is an often-overlooked factor that can significantly impact Recoverable Depreciation. As the general price level of goods and services rises over time, the cost of replacing or repairing damaged property can also increase. This inflationary effect results in the Replacement Cost Value (RCV) of an item being potentially higher today than when the policy was purchased or just a few years ago. Therefore, if we calculate Recoverable Depreciation using outdated cost estimates, it might not accurately represent today’s market’s actual replacement cost. Policyholders should be aware of this dynamic and consider working with insurance professionals who actively monitor inflation trends and update valuations accordingly. Understanding and accounting for inflation in the calculation of Recoverable Depreciation ensures a more accurate and fair settlement, aligning the claim payout with the real-world costs of repair or replacement.

RCV vs. ACV: What’s the Difference?

Replacement Cost Value (RCV)

Replacement Cost Value (RCV) policies cover the cost to replace damaged or lost property without deducting depreciation. In other words, if an item is destroyed, the insurance company pays the cost to replace it with a brand-new item of like kind and quality.

- 1. Pros: Can fully cover the costs to replace or repair damaged property.
  2. Cons: Typically comes with a higher premium.

Actual Cash Value (ACV)

Actual Cash Value (ACV) policies, on the other hand, take into account depreciation. The insurance company will pay for the cost to replace the item, minus a deduction for the wear and tear or aging of the item. Essentially, ACV pays for what the item was worth at the time of the loss.

- 1. Pros: Generally offers lower premiums.
  2. Cons: May result in out-of-pocket expenses if the depreciated value doesn’t cover the full replacement cost.

When does the policyholder receive payment for recoverable depreciation?

Initial Payout

After a claim is approved, the insurance carrier usually pays the ACV first, holding back the recoverable depreciation.

Final Payout

Insurance companies generally pay recoverable depreciation after completing repairs or replacements and providing proper documentation.

Factors Affecting Payment

- 1. The quality of repairs.
  2. The timeliness of completion.
  3. Compliance with policy terms.

How to Claim Recoverable Depreciation

Policyholders with a Replacement Cost Value (RCV) policy must actively reclaim recoverable depreciation. This process involves carefully following a series of coordinated steps to ensure they receive the full entitled amount. This process is not just about understanding the numbers but also knowing how to navigate the insurance claim procedures and documentation requirements. Below are the general steps to reclaim recoverable depreciation; however, if you’re unsure of the requirements within your policy to reclaim recoverable depreciation, get your policy reviewed by our team of legal experts.

1. Complete Repairs: Work with a licensed contractor to ensure quality repairs.
2. Submit Documentation: Provide invoices and other necessary documents to your insurance company.
3. Follow Up: Regularly check with the insurance carrier to ensure the process is on track.
4. Consult Professionals if Needed: If issues arise, consider seeking professional help.

The Importance of Recoverable Depreciation for Policyholders and Insurance Carriers

Recoverable depreciation is more than just an insurance term; it’s a critical component that directly impacts a policyholder’s claim payout. Understanding this aspect is crucial for policyholders, ensuring a fair settlement that matches repair or replacement costs. Meanwhile, insurance carriers employ recoverable depreciation to align claim payments with real-world expenses and prevent overpayment.

Why it Matters to Policyholders

- 1. Financial Planning: Helps in understanding potential out-of-pocket costs.
  2. Claim Recovery: Knowing how to claim recoverable depreciation ensures that policyholders receive what they’re entitled to.
  3. Informed Decision Making: Helps in selecting the right insurance policy that suits individual needs.

Why Insurance Carriers Use it

- 1. Prevents Overpayment: By paying only the ACV initially, insurers avoid overpayment if policyholders opt not to repair or replace the damaged item.
  2. Encourages Proper Restoration: Recoverable Depreciation motivates policyholders to complete repairs or replacements to reclaim the withheld depreciation.
  3. Aligns with Actual Costs: It ensures that payments align with actual costs, providing a fair system for both parties.

Common Misconceptions

- 1. It’s Automatically Paid: Some policyholders mistakenly believe it receives an automatic payout without fully understanding the conditions.
  2. No Time Limit: There might be time constraints that require completing repairs within a specific period.
  3. All Policies Include It: Not all policies include recoverable depreciation; it depends on the type of policy and insurer.

Recoverable depreciation is more than just an insurance jargon; it’s an essential part of many insurance policies that can have significant financial implications. Whether you hold an RCV or ACV policy, comprehending the operation of recoverable depreciation and its payment timing can empower you to navigate the intricate insurance landscape with confidence. Gaining awareness enables you to make well-informed choices tailored to your unique circumstances and to secure the entitlements you deserve.Always consult with an insurance professional to understand your unique circumstances fully.

“Riot or Civil Commotion coverage” is commonly found in residential and commercial property insurance policies. There has been a lot of uncertainty amongst business owners that have suffered property losses due to the riots in the past few days. Hopefully the following will clarify some of those concerns.

These perils cause physical damage to the buildings, personal property damage, generate large expenses, and income losses. Riot, civil commotion, and vandalism are covered perils under virtually all commercial property policies. They are covered causes of loss generally found under “specific perils” within an “all risk” policy. Unless riot, civil commotion, or vandalism are specifically excluded in the policy, these damages should be covered.

Perils Defined:

Most property policies do not actually define riot, civil commotion, or vandalism. However, the legal definition of riot can vary. The term typically means a public disturbance involving an act of violence committed by one or more individuals who are part of a group of at least three people. To constitute a riot, the individuals must act together to commit (or threaten to commit) violent acts against other people or property.

A civil commotion is similar to a riot but involves more people. It is a revolt by a large gathering of people in a public place. Riot and civil commotion can be difficult to differentiate so the perils are often listed together. Vandalism refers to the intentional destruction of another’s party’s property.

How the Courts Define the Perils:

In Blackledge v. Omega Insurance Company, four elements were necessary for a riot or civil commotion to exist: (1) Unlawful assembly of three or more people, (2) acts of violence, (3) intent to mutually assist against lawful authority and (4) public terror.

The case of Insurance Co. Of North America v. Rosenberg et al., a riot was defined as the “gathering of three or more persons” with the “common purpose” to do “an un/lawful act [with the intent to use] force or violence.”

In Pan American World Airways, Inc v Aetna Casualty & Surety Co. , the court compared the terms riot and civil commotion,

“The local nature of the perils of “riot” or “civil commotion” imparts occasional local or temporary outbreaks of unlawful violence.”

“Riots and civil commotion are purely ‘domestic disturbances.’”

They are “essentially a kind of domestic disturbance…such as occur among fellow citizens or within the limits of one community.”

In order for a disturbance to qualify as a civil commotion, “the agents causing the disorder must gather together and cause disturbance and tumult.””

General Policy Language:

Modern policies generally include the following as named or specified perils. Specified causes of loss will also have the same perils listed. All of which include riot, civil commotion, and vandalism as a covered loss.

Named Perils: fire, lightning, wind, hail, explosion, smoke, impact from aircraft and vehicles, objects falling from aircraft, strike, riot, civil commotion, vandalism, theft, attempted theft, sprinkler leakage or collapse of buildings.

“Specified Perils” or “Specified Causes of Loss” means aircraft; civil commotion; explosion; falling objects; fire; hail; leakage from fire extinguishing equipment; lightning; riot; “sinkhole collapse”; “Volcanic action”; water damage; weight of ice, snow, or sleet; and windstorm.

In most policies the damages sustained by these actions of riots or civil commotion are generally covered, however there are some policies will not fall within the majority. The easiest way to ensure that your claim is built for the best possible outcome is to refer your policy to a competent insurance professional to determine coverage for property damage or business interruption. As a courtesy Premier Claims offers free policy reviews, if you are concerned about your policy please reach out to us for your free review.

Sources:

10A Couch on Ins. § 152:6; Pan American World Airways, Inc. v. Aetna Casualty & Surety Co., 505 F.2d 989, 1019-20 (2d Cir. 1974).

Ins. Co. of N. Am. v. Rosenberg, 25 F.2d 635, 636 (2d Cir. 1928).

Blackledge v. Omega Ins. Co., 740 So.2d 295 (Miss. 1999).

https://www.thebalancesmb.com/property-coverage-for-riots-462690

https://www.propertyinsurancecoveragelaw.com/2014/11/articles/commercial-insurance-claims/riot-or-civil-commotion-coverage/

In the insurance world, there’s often a gap between policyholders’ expectations and what insurance carriers actually cover. This gap can arise from a lack of knowledge about local building codes, leading to missed items or omissions in insurance claims. Contractors may unwittingly find themselves performing uncompensated work, either due to not requesting payment for specific items or lacking awareness of allowable expenses.

Understanding Ordinance or Law Coverage

Ordinance or Law Coverage stands as a pivotal component within insurance policies, particularly when building regulations influence reimbursements for construction and repairs. The Insurance Information Institute informed policyholders that “building codes are updated periodically and may have changed significantly since a home was built. In the event of damage, a policyholder may be required to rebuild their home to the new code’s standards.” Homeowners’ policies usually include limited building ordinance coverage, which can be extended through an endorsement. This coverage requires carriers to approve repairs following local building codes, compelling contractors to address often-excluded elements like ice and water shields, drip edges, house wraps, and flashings.

Research and Communication

Empowerment lies at the heart of effective insurance claims management. This begins by investing time in comprehending local building codes and manufacturer specifications, coupled with proactive engagement with Building Inspectors. Armed with such knowledge, policyholders gain a more authoritative position when negotiating with insurance carriers. This ultimately ensures equitable compensation for essential repairs, transforming potential challenges into opportunities for a fair resolution.

Navigating Your Policy’s Stance on Ordinance or Law Coverage

One of the most prudent steps policyholders can take is a comprehensive review of their current policy to determine whether Ordinance or Law coverage is included. Overlooking this coverage could lead to unforeseen out-of-pocket expenses or suboptimal repairs that fall short of complete replacement. To locate this part of your policy coverage, “review your declarations page and the policy fine print. Not all policies list code upgrade coverage in the same way,” as advised by United Policyholders. If your policy lacks this coverage, our Premier Claims team is here to guide you toward incorporating it. We understand the significance of such coverage and its role in safeguarding your interests.

Seeking Assistance with Denied or Underpaid Claims

Navigating insurance claims can sometimes be a complex journey, especially when they’re denied due to local codes. It’s in these moments that policyholders need a steadfast partner. At Premier Claims, we stand ready to assist, armed with adept knowledge, empathy, and professionalism. Our commitment is to guide you through the claims process, ensuring that you receive the rightful compensation you deserve. Facing denied claims due to local codes is not a solitary battle when you have Premier Claims by your side.

In the realm of property insurance claims, knowledge is indeed power. Premier Claims’ dedication to education and assistance reflects our commitment to fostering a more informed policyholder community. By unveiling the intricacies of building codes and insurance coverage, we aim to empower you to navigate claims with confidence. Let our expertise serve as your beacon, ensuring that you not only understand but also assert your rights within the insurance landscape. Connect with us today to embark on a journey of knowledge, empowerment, and fair claims resolution.

The Coronavirus has significantly affected the stock market, leading to a sharp and rapid decline in average returns. The forecast indicates further deterioration before any improvement. Given the indefinite duration of the pandemic, the market is likely to continue its decline, contributing to a global economic recession expected to be fully established by the end of 2020. In this article, I’ll discuss how the stock market trend impacts insurance claim payments.

S&P 500 2020 Average Annual Return to Date: -17.55%

NASDAQ 2020 Average Annual Return to Date: -11.81%

Dow Jones 2020 Average Annual Return to Date: -20.53%

According to Marco Trends the market has an average annual return rate of -16.63%, compared to a 11.08-15.4% average return in the previous decade within the same indexes. And while the current rate of return for these markets has stabilized, somewhat – according to Market Watch, the current average rate for the three indexes is 1.05%, and it will take the market some time to recover.

Forecasters predict a further drop in stock market returns by the end of Q2 and the beginning of Q3, which is causing concern. Analyst Charles Dumas suggests that we should regard the notion of the economy rebounding swiftly once the pandemic subsides as unlikely and counterintuitive. This perspective rests on the reality of more than 700,000 jobs lost solely in the United States.

Stock Market impact to insurance and property claims

A common belief is that insurance carriers make their profits by charging and accepting premiums. These premiums are then taken into a pool from which both claims are paid and profits are drawn. And while this isn’t entirely inaccurate, insurance carriers are only marginally profitable if they rely on premiums alone. Insurance carriers, like any business and investor, have shareholders and rely upon the stock market. Insurance carriers profit by investing premiums in stocks for returns before paying claims from the premium pool.

Ultimately, with the stock market in a current downtrend, insurance carriers must find another way to keep profits up. This means the industry is likely to see an increase in denied claims and underpaid claims.

What can a policyholder do? Premier Claims offers not only complimentary policy reviews, but risk-free denied and underpaid claim reviews. Premier Claims offers a comprehensive service, including pre-contract legal and insurance review. Once a client contracts with us, our services encompass legal oversight, meticulous estimating using professional software, and persistent negotiation until claims are maximized.

Concerned your claim was underpaid, or receive a denial?

Need to make sure your policy covers what’s needed?

Contact us at info@premier-claims.com or 877.219.0049, or use our Claims Intake page to upload your documents and request your free review today!

Written by: Kyle Maring, CEO & Senior Public Adjuster

Links to cited resources:

https://www.macrotrends.net/charts/stock-indexes

https://markets.businessinsider.com/news/stocks/stock-market-forecast-outlook-further-declines-coronavirus-recession-ts-lombard-2020-4-1029068946

https://www.marketwatch.com/

COVID-19 has brought a lot of uncertainty to Small Businesses across the United States. Many business owners are feeling the financial pressures brought on by mandatory closures, or decreased traffic as a result of shutdowns. Things are changing daily as well, so it can make even the most veteran businessperson’s head spin.

What every Small Business Owner needs to know as they navigate COVID-19:

Make sure your employees know about the resources available to them:

- Federal tax filing and payment deadline postponed until July 15, 2020. Many states have extended their filing deadlines as well.
- Student Loans do not accrue interest, and the lender may put some loans in Forbearance if the borrower cannot pay due to COVID-19.
- The IRS will directly deposit Federal Stimulus checks (amounting to $1200 per individual, $2400 if married, plus an additional $500 per child, with applicable limitations) for those who have provided their banking information.

If you must lay off employees, recognizing the increased Federal Unemployment Benefits could provide you with peace of mind.

- Unemployed workers will receive an extra $600 per week, added to their regular benefits. Authorities have approved this augmentation until July 31, 2020.
- For some employees, the increased Unemployment Benefit Payments may be higher than their regular pay.

The CARES Act – Payroll Protection Program (PPP)

- Loans are available for eligible Small Businesses, without having to provide a personal guarantee or collateral
- Loans are for the amount of 2.5 X your average monthly payroll costs for the last 12 months. This includes:
  - Salary, Wage, & Commission
  - Payment of cash tips
  - Vacation, Sick, Parental, or any other Medical Leave
  - Allowance for dismissal or separation
  - Payment for group health insurance
  - Payments for retirement benefits
  - State & Local taxes assessed on the compensation of the employee
- If you maintain your employees throughout the crisis, these loans will be forgiven up to the amount of 8 weeks of expenses in the following categories:
  - Total payroll costs as determined above
  - Interest on mortgages held by the business
  - Rent on a leasing agreement
  - Payments on all utilities
- Applications are to be submitted to your bank

Emergency Injury Disaster Loan (EIDL)

- Loans up to $2M are available to small business that have been impacted by COVID-19
- These loans have an APR of 3.75% with terms up to 30 years
- These working capital loans can be used to pay fixed debts, payroll, accounts payable, and other bills that the disaster would not have affected.
- These loans do not intend to replace lost sales, lost profits, or provide assistance for expansion.
- Applicants make applications via the SBA Disaster Assistance Program at disasterloan.sba.gov.

Economic Injury Disaster Loan Emergency Advance

- This loan advance will provide up to $10,000 of economic relief to business that are currently experiencing temporary difficulties
- This loan advance will not have to be repaid
- The application is brief and can completed online at covid19relief.sba.gov

Delay the Payment of Employer Payroll Taxes

- Employers can defer payments of their share of the social security tax over the following two years.
- First half due 12/31/2021 and second half due 12/31/2022.
- You are not eligible to defer this payment if you are participating in the Payroll Protection Program.

Business Interruption Coverage provided by your insurance carrier

- Many business and commercial property policies include coverage for “Business Interruption:
- You could have an entitlement to an insurance payment for loss of revenue when closure stems from property damage and/or government mandate.
- Authorities frequently review the insurance industry to figure out how to cater to the needs of business owners.
- Premier Claims offers complimentary policy reviews to see if you have coverage.

Click Here to upload your policy and request your complimentary review by our legal team.

Written by CFO Melissa Hurrington

The Coronavirus global pandemic has significantly impacted not only individuals throughout the world but businesses and their employees’ livelihoods. The United States pledges almost $1 trillion to bail out big businesses and banks, aiming to soften outcomes. However, this action will only help limited small businesses and won’t safeguard the future of everyday working Americans. With an uncertain timeline ahead for the economic impact, many businesses will experience interruption and may fail, resulting in an ever-growing unemployment rate, and a frightening time for those directly affected.

For businesses grappling with prolonged closures due to COVID-19, Premier Claims, a National Public Adjusting Firm, brings hope. We stand by policyholders, advocating for property and business insurance claims. While policies usually cover direct physical loss, extensions might also cover lost revenue during a business interruption. There may also be further coverage for business interruption based on a civil authority shutdown.

Business Interruption Coverage

This coverage typically allows for the recovery of lost income and associated extra expenses. This coverage requires the interruption resulting from direct physical loss or damage of the insured property caused by a covered peril. As many states mandate businesses too close, they are specifically referencing that this is being done, at least in part, due to the damage the virus is doing to the property. This is opening up the door to potential business interruption claims.

Civil Authority Coverage

This coverage is designed to apply when access to an insured’s property is hindered by a civil authority’s order due to physical damage. The damage must result from an insured peril affecting nearby property. This coverage also is opening the door to potential claims.

Whether or not you are going to have coverage is very dependent on your policy. Many policies have an exclusion of loss due to viruses or bacteria. These exclusions generally mean that the carrier will not pay for loss or damage caused or resulting from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness, or disease. If your policy has this type of exclusion, then recovery under business interruption or civil authority will generally not be a possibility.

Across the nation, states propose bills for COVID-19 business interruption coverage, despite virus exclusion concerns. While questioning their constitutionality, the application of these coverages remains uncertain. The best thing you can do right now, is to review your insurance policies and see if coverage is available. If an exclusion does apply, then you should monitor some of these bills if applicable to your state.

During this time our firm will be conducting complimentary policy reviews and assessments to assist those affected by these business closures. In addition, Premier Claims is dedicated to reducing our fees in handling the claim in cases where coverage exists, and a claim can be filed. We’re here to let businesses and commercial property owners know that we are a resource.

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