RELEASE DATE: April 28, 2002

FOR INFORMATION: Mary Bonelli or Mitch Wilson, Ohio Insurance Institute, 614.228.1593
After hours for Mary: 614.443.0400 / Mitch 614.868.0575

Tornado/Storm coverage and repair info

Insurance claim representatives from a number of companies are in many parts of the state assessing damage from the tornado and storms that struck many parts of Ohio on Sunday, April 28, 2002. Insured loss information is not yet available and will be provided as soon preliminary claims information becomes available.

The OII recommends that residents and business owners with property damage take measures to ensure against further damage. Holes in roofs and broken windows should be covered with plastic or plywood, and the property should be secured to deter theft and vandalism. Keep receipts associated with shoring up damaged property, since most insurers will reimburse you for these expenses. If a structure's contents were damaged, policyholders should prepare an itemized list that can be provided to their insurance claims representative.

HOME AND RENTERS INSURANCE COVERAGE

Renters and home owners are protected by the insurance policy's "windstorm" peril coverage from losses arising from high winds, hail and tornadoes. Renters insurance coverage protects their belongings, while homeowners typically protects both the structure (home) and its contents. The amount of coverage under these policies is based on the limits of coverage selected by the policyholder.

"Additional Living Expense Allowance" or "Loss of Use" coverage is part of a standard homeowners or renters insurance policy. It covers living expenses, up to an amount specified in the policy, when residents cannot continue living in their home, apartment or condominium due to damages by an insured peril, such as a windstorm or tornado. Examples of coverage include motel or dining expenses.

If your vehicle is damaged, coverage is provided by your auto insurance policy under "Comprehensive" or "Other than Collision." This is an optional coverage that protects your vehicle in situations other than a collision or overturn.

If you experienced a loss from the storms:

• Contact your insurance agent or company representative as soon as possible.
• Closely inspect property and cars for damage.
• Photograph any damage and inventory losses, especially if heavy, widespread damage has occurred. These will assist with claims handling.
• Secure property from further damage or theft and save any related receipts, since many insurers will reimburse you for these expenses.
• If required to seek temporary housing due to a covered loss such as a tornado, check your policy for "additional living expense" coverage information.
• Beware of rip?offs. Carefully check the background of contractors and others who promise "cheap" repairs to your property. You insurer may even be able to provide you assistance in locating a reputable contractor.
  • NOTE: visit these Web links for additional construction and/or repair tips:
    • www.nicb.org/consumer/index.html - Don't be Victimized Twice…Avoid Disaster Fraud
    • www.ftc.gov/bcp/conline/pubs/services/homeimpv.pdf - Home Sweet Home Improvement

BUSINESS OWNERS INSURANCE COVERAGE

Businesses are protected from windstorm or tornado losses similar to a homeowner. If they are a building tenant, it would be similar to renters coverage. However, many businesses have coverage to protect against business interruption, among other additional forms of coverage.

Business interruption insurance compensates for income lost if a company has to vacate the premises due to disaster-related damage.

• Business interruption insurance covers the profits a business would have earned, based on the company's financial records, had the disaster not occurred.
• The policy covers operating expenses that continue like electricity even though business activities have come to a temporary halt.

It's important to make sure that policy limits are sufficient to cover company expenses for more than a few days.

Filing a claim

• When a loss occurs, contact insurance agent and company immediately.
• After a loss, take steps to protect the property from further damage with temporary repairs. Secure the property to deter theft and vandalism. Keep receipts associated with the repairs since most insurers will reimburse these expenses.
• If immediate repairs to equipment are necessary, save the damaged parts in case the claims adjuster is interested in examining them.
• Get at least two bids on the cost to repair or replace damaged property.
• If filing a business interruption claim, prepare records to show the income from the business both before and after the loss.
• Keep detailed records of business activity and extra expenses during the interruption period. This should include expenses that continue during the time that the business is closed such as advertising.

Disaster preparedness

Businesses that recover quickly are those that plan in advance, including a recovery plan.

• Keep duplicate records of both computerized and written records. Store a backup of your electronic and written records off -premises.
• In order to maintain market share while the business is closed for repairs, identify the critical business activities and resources needed to support them.
• Plan for the worst possible scenario. Do research before a disaster strikes by finding alternative facilities, equipment and supplies and locating qualified contractors.
• Set up an emergency response plan and train employees how to carry it out. Consider the things you may need to initialize during an emergency such as back-up sources of power and communications systems. Also, consider the supplies that may be needed such as first-aid kits and flashlights.
• Compile a list of important phone numbers and addresses including local and state emergency management agencies, major clients, contractors, suppliers, Realtors, financial institutions, insurance agents and claims representatives. The list should also include employees and company officials. Keep copies off the premises in case the disaster is widespread.
• Decide on a communications strategy to prevent loss of clients/customers. It is imperative for clients and customers to know how to contact your company at its new location. Among the possibilities to explore, depending on the circumstances, are posting notices outside the original premises, contacting clients by phone or mail, placing a notice in local newspapers and asking friends and acquaintances in the local business community to help disseminate the information.
• Make arrangements to use the facilities of another firm in the same line of work in case there is an interruption period. Some insurance companies offer a discount on business interruption insurance if your business has a place where it can operate in the event of a fire or disaster.
• Discuss insurance with people in the same business. You may pick up trends in price and other developments, which can save money.