Hurricane-damaged US firms dig in for insurance fight

A car dealership is covered by Hurricane Harvey floodwaters near Houston. (Reuters)
Updated 15 September 2017

Hurricane-damaged US firms dig in for insurance fight

NEW YORK: Business owners who are trying to get back on track after hurricanes Harvey and Irma now face a different sort of challenge: trying to recoup lost income from their insurers.
Exclusions in the fine print of policies, along with waiting periods and disagreements over how to measure a company’s lost income, make business interruption claims among the trickiest in an industry renowned for complexity.
“I think the whole thing is a rip-off,” said Thomas Arnold, an optometrist in Sugar Land, Texas. He said his business, Today’s Vision, was shuttered for almost five days after Hurricane Harvey struck because nearby flooding kept employees and patients from getting there.
Arnold says he pays $1,083 per month for coverage. But after he filed a claim, he said the US unit of Zurich Insurance Group, rejected it because his business was not physically damaged.
Zurich does not comment about specific claims, the company said in a statement. It added that business interruption coverage generally requires “direct physical damage” to a property for a payout.
It was Arnold’s second disappointing experience with business interruption coverage. He said another insurer denied his claim in 2008 after a nine-day power outage from Hurricane Ike.
Devastating storms are hitting the US with increasing frequency. Risk modeling firm AIR Worldwide predicts losses to all properties from the flooding in Texas alone will be $65 billion to $75 billion, regardless of whether they are insured.
The income lost by shuttered firms makes up a significant chunk of overall losses from a natural disaster and can hobble the pace of a community’s economic and social recovery.
Hurricane Katrina in 2005, for example, caused about $25 billion in insured commercial losses, of which $6 billion to $9 billion has been attributed to business interruption, according to information posted on AIR’s website.
The National Flood Insurance Program does not offer a business interruption component. The program is largely used by homeowners, but it also covers commercial structures for up to $500,000 in damage, with another $500,000 for the contents.
That is why companies able to afford the additional protection of business interruption insurance, usually large and medium-sized firms, often purchase it despite the potential for unsuccessful and drawn-out claims.
Big Star Honda, a car dealership in Houston, lost 600 vehicles – 95 percent of its inventory – and was shut for five days after Harvey.
Its managers are now girding themselves for a potentially long slog with the firm’s insurance company as the dealership prepares to make a claim on its business interruption policy.
“We’re collecting every single invoice that pertains to the hurricane,” said Allen Paul, Houston regional vice president of Ken Garff Automotive Group, which owns the dealership.
“I’m really curious to see how that goes,” he said.


Trump says Baghdadi successor in US crosshairs

Updated 59 min 24 sec ago

Trump says Baghdadi successor in US crosshairs

  • The US president used his speech in New York to claim that Daesh’s leadership was running scared in the wake of Baghdadi’s death
  • Donald Trump: Thanks to American warriors, Al-Baghdadi is dead, his second in charge is dead, we have our eyes on number three

NEW YORK: US President Donald Trump placed the Daesh group’s new chief in the crosshairs Monday as he marked Veterans’ Day by celebrating the killing of the extremists’ former leader Abu Bakr Al-Baghdadi.

While US presidents traditionally mark the day by laying a wreath at a vast military cemetery in Arlington, near Washington, Trump traveled to New York where he made an address ahead of the city’s annual parade of veterans.

Trump was widely criticized after announcing a full withdrawal of US troops from Syria last month, with opponents and even some allies saying it could allow Daesh to rebuild as well as leaving US-allied Kurdish fighters vulnerable to a Turkish invasion.

But the US president used his speech in New York to claim that Daesh’s leadership was running scared in the wake of Baghdadi’s death in a raid in the northwestern Syrian province of Idlib on October 26.

“Just a few weeks ago, American special forces raided the Daesh compound and brought the world’s number one terrorist leader to justice,” he said.

“Thanks to American warriors, Al-Baghdadi is dead, his second in charge is dead, we have our eyes on number three.

“His reign of terror is over, and we have our enemies running very, very scared. Those who threaten our people don’t stand a chance against the righteous might of the American military.”

After the death of Baghdadi and Daesh’s main spokesman, Abu Hassan Al-MuHajjir, in a raid the following day, the organization named the little known Abu Ibrahim Al-Hashimi Al-Quraishi as its new leader.

Following the uproar over his announcement of a full troop withdrawal, Trump said that he would leave some troops in the region to protect valuable oil fields.

General Mark Milley, chairman of the Joint Chiefs of Staff, said in an interview at the weekend that US troop levels in northern Syria would probably stabilize at around 500.