Tornado Damage Insurance Claims: The Twist May Be in the Policy Language

Indiana has just been clobbered – again – by fierce, widespread tornadoes. The website of the National Weather Service has excellent data you can review to track the history of the storms and the damage they caused in your area. For example, visit: http://www.weather.gov/ind/august242016severestorm track dataWhen the time comes to finalize your claim with your commercial or homeowners insurance carrier for the damage caused to your property by these strong storms, there are some common pitfalls to be aware of about what is or may be covered.

For example, depending on the scope or extent of the damage to your property, there may be additional dollars over and above the limits of your property coverage available to pay for the cost of debris removal. Policies provide this coverage in different ways and it is important to read and understand how your policy works when you are negotiating with your insurer. Here is one example of how a property policy may provide debris removal coverage:

Debris Removal Language

Language like this appears simple enough on first reading, but look again.  Let’s say you incurred expense removing debris following a storm, and assume the cost of removing the debris was actually more than the damage caused to your structure.  This policy appears to limit the available dollars for debris removal to 25% of the “amount we pay for the direct physical loss of or damage to Covered Property.”  The capital letters means “Covered Property” is defined somewhere else in the policy.  Defined as what?  The building?  The building and outbuildings?  It is important to know.  Also, when this policy provides 25% of the amount of direct loss or damage “plus” the “deductible in this policy applicable to that loss or damage” does that mean 25% of the deductible or 100% of the deductible?  Again — this is important to know when you are settling with your insurance company.

What if all you have is trees down, but (thankfully) they missed your house?  Homeowners policies often provide limited coverage for damage to trees and shrubs. The straight-line winds that accompanied recent storms brought down many, many trees – both living and dead – and the cleanup cost can be staggering. Yet, your homeowner’s policy from that “good neighbor” company that is “on your side” may only provide you with very limited policy proceeds for the cleanup of trees, and then only under very limited circumstances.

Here is some typical language from a standard homeowner’s policy:

We will also pay your reasonable expense, up to $1000, for the removal from the “residence premises” of:

1)  Your tree(s) felled by the peril of Windstorm or Hail or Weight of Ice, Snow or Sleet; or

2)  A neighbor’s tree(s) felled by a Peril Insured Against under Coverage C; provided the tree(s):

3) Damage(s) a covered structure;

4) Does not damage a covered structure, but:  a) Block(s) a driveway on the “residence premises” which prevents a “motor vehicle”, that is registered for use on public roads or property, from entering or leaving the “residence premises”; or  b) Block(s) a ramp or other fixture designed to assist a handicapped person to enter or leave the dwelling building.

The $1000 limit is the most we will pay in any one loss regardless of the number of fallen trees. No more than $500 of this limit will be paid for the removal of any one tree.

Say that again?!

If you need assistance untangling the language of your policy and working to resolve your claim with your insurance company, the policyholder attorneys of Parr Richey are always ready to help. Call Mike Schultz or Jim Buddenbaum toll free at 888-337-7766.

Got Water?

Got water?

Is your basement now an indoor wading pool, your driveway flooded, your cars soaked and stalled? Are you watching your property – and you – fall complacent victim to the ravages of this record-setting rainy summer season? More than in many years before, you are not alone in these tragic circumstances – neither property damage, nor in the subsequent uphill fight to regain what is rightfully yours as insured property owner and tax-paying citizen….

The heavy and constant rains we in the Midwest are experiencing have wreaked havoc on city streets, public spaces and properties throughout Indiana – and with more in the forecast, there appears to be no end in sight.  It is confirmed: July 2015 set rainfall records, supported by statistics that have been maintained since the mid-1800’s.

As you may have already and unfortunately learned, with all that rain and water comes damage.  Trees down.  Basements flooded.  Driveways and landscapes – your investments – washed away.  Power outages that destroy refrigerator and freezer contents.  The toll taken might be a cumulative destruction over weeks; it might have happened by flash flooding, in the space of a few hours.

To repair some of this damage — particularly the structural damage done to homes — many property owners will turn to their insurers for help.  Those insurers, in turn, will often make arrangements to involve contractors.  The contractors will likely ask you to sign a contract for the work to be performed.

If the work you are contracting for involves repairs to residential property, the contract you sign is governed by the Home Improvement Contracts Act (“HICA” or “the Act”).  Unfortunately, there are still many contractors, let alone homeowners, who are unaware of the existence and requirements of the Act.

It is important to keep in mind the remedial purpose of HICA and the fact that it provides homeowners with remedies not otherwise available at common law. The Act exists for the purpose of protecting consumers “by placing specific minimum requirements on the contents of home improvement contracts.” Homer v. J.M. Burman, 743 N.E. 2d 1144, 1148 (Ind. Ct. App. 2001). Contractors are held to a “strict standard” in order to effectuate the purpose of the Act. Mullis v. Brennan, 716 N.E.2d 58, 65 (Ind. Ct. App. 1999). As the Indiana Court of Appeals has said:

[F]ew consumers are knowledgeable about the home improvement industry or of the techniques that must be employed to produce a sound structure. The consumer’s reliance on the contractor coupled with the well-known abuses found in the home improvement injury served as an impetus for the passage of the Act, and contractors are therefore held to a strict standard.

Benge v. Miller, 855 N.E.2d 716, 720 (Ind. Ct. App. 2006) (emphasis added), citing Mullis, 716 N.E.2d at 65.

The Act applies to residential property. I.C. § 24-5-11-1. A “home improvement” under the Act is defined as “any alteration, repair, or other modification of residential property.” I.C. § 24-5-11-3. Significantly, the Act defines a “home improvement supplier” as a person, including a corporation, “who engages in or solicits home improvement contracts whether or not the person deals directly with the consumer.” I.C. § 24-5-11-6 (emphasis added). Anyone who chooses to engage in this conduct (soliciting) is by definition a “home improvement supplier” and is required to comply with the various provisions and protections of the Act. It is important to remember that the definition of “home improvement supplier” in I.C. § 24-5-11-6 does not require that the home improvement supplier deal directly with the consumer; a person who solicits the home improvement contract is covered by the Act “whether or not the person deals directly with the consumer.” Id.

The Act sets forth certain minimum requirements for home improvement contracts.  A contract lacking these requirements violates the Act and gives rise to certain remedies.  These remedies are critically important when the contractor fails to perform as promised.  The basic requirements are that each contract must contain:

(1) The name of the consumer and the address of the residential property that is the subject of the home improvement.

(2) The name and address of the home improvement supplier and each of the telephone numbers and names of any agent to whom consumer problems and inquiries can be directed.

(3) The date the home improvement contract was submitted to the consumer and any time limitation on the consumer’s acceptance of the home improvement contract.

(4) A reasonably detailed description of the proposed home improvements.

(5) If the description required by subdivision (4) does not include the specifications for the home improvement, a statement that the specifications will be provided to the consumer before commencing any work and that the home improvement contract is subject to the consumer’s separate written and dated approval of the specifications.

(6) The approximate starting and completion dates of the home improvements.

(7) A statement of any contingencies that would materially change the approximate completion date.

(8) The home improvement contract price.

(9) Signature lines for the home improvement supplier or the supplier’s agent and for each consumer who is to be a party to the home improvement contract with a legible printed or a typed version of that person’s name placed directly after or below the signature.

It is also important that the contract be written in a way that can be reasonably read and understood by the person or persons who sign it.

If you have questions about any home improvement contract with which you are presented you should seek legal advice.

Indiana Insurance Law: IDOI Places Moratorium on Policy Cancellations to Help Tornado Victims in Southern Indiana

Tornadoes and severe storms recently devastated large areas of southern Indiana on March 2, 2012. As a direct response to those events and in an apparent effort to protect policyholders affected by the weather disaster, the Indiana Department of Insurance (“IDOI”) has issued a moratorium on the cancellation of insurance policies. Specifically, the Commissioner of the IDOI is requiring all insurance companies to implement an extension and/or grace period of sixty (60) days in the administration of insurance policies, including both personal lines and commercial lines.

According to the policy cancellation moratorium memo, issued as “Bulletin 191” on March 6, 2012, the moratorium applies only to “cancellations/non-renewals attributed to a failure to pay premiums directly as a result of the Disaster Event during the 60-day period. If a policy is to be cancelled or non-renewed for any other allowable reason, the cancellation or non-renewal may be made pursuant to the statutory notice requirements”.

It is expected that numerous issues regarding coverage and the payment of claims are likely to arise in the aftermath of the weather disaster affecting our state. Policyholders may need to be aware of this moratorium and its potential impact on their policies or coverages. Any questions regarding such issues should be directed to attorneys who typically handle these matters.

Mike Schultz is a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson with offices in Lebanon and Indianapolis. The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.