The devastation brought by Hurricane Harvey wasn’t the first severe storm Texans have suffered, and it surely won’t be the last. Businesses across Texas saw major damage due to torrential rain, high winds, and flooding that lasted for weeks. For owners and operators of car dealerships, that meant the loss of over a million vehicles. Attorney Bill Voss explores the scale of hurricane damage to dealerships and how owners can get adequate insurance payments and other relief for their losses.
Steps to Take After a Hurricane Damages Your Car Dealership
The first thing you should do after sustaining hurricane damage is to submit a claim with your insurer. Be sure to ask the insurance company when it plans to send an inspector out to your property. Since the hardest-hit areas are often visited first after a disaster, you may be waiting anywhere from a week to several months before the inspector can take stock of the damages. You can make sure your claim is not undervalued by taking pictures and video of the property, making a thorough and accurate list of your losses, and keeping as much of the damaged items you can (unless you are forced to discard them for health reasons).
The next thing you should do is examine your policy to find out which of your losses are covered, including:
- Property damage. Dealerships that have replacement cost vs. actual cash value policies are much better poised to recover from a storm, since they will not be hit with depreciation costs. That said, most commercial policies will not pay for flooding caused by natural weather events.
- Relocation of inventory. If you relocate your vehicles offsite or to another dealership, your coverage may pay for tow trucks, mileage, and storage costs to house your vehicles until repairs on your facility are complete.
- Business interruption coverage. Many dealerships must remain closed while standing water is pumped out and repairs can be made. Business interruption insurance allows for a steady stream of revenue to properties that have suffered direct physical damage from a covered event.
Additional Sources of Funds to Help With Hurricane Losses
Insurance providers are inundated with claims after a natural disaster, which has two notable effects: lengthening claim response times and reducing the amount of funds available for each individual claim. Car dealership owners may be able to get additional compensation for hurricane damage through:
- The National Flood Insurance Program. Most private insurers do not offer flood insurance, so all businesses in areas prone to flooding should purchase a policy through NFIP. Commercial NFIP policies provide up to $500,000 in structural damage coverage with a further $500,000 for lost contents. Business interruption coverage is not available. After Hurricane Harvey, Texans filed over 87,000 flood insurance claims through NFIP, which has paid out over $608 million in expedited claims payments.
- The National Automobile Dealers Association Foundation. The NADA Foundation encourages all of its members to donate to its Emergency Relief Fund, which provides help to dealers and owners who are hit with sudden property damage and personal losses caused by adverse weather events.
- The Federal Emergency Management Agency. FEMA offers many different kinds of financial support and disaster relief after a hurricane, including long-term housing and federal grants to help victims recover. Grants are distributed according to need, and are typically not enough to fully restore lost property. In the 30 days after Harvey, over $1.5 billion in federal funds was paid to Texans, largely in the form of flood insurance advance payments and assistance grants.
- The U.S. Small Business Administration. The SBA uses government funds to provide low-interest loans to businesses of all sizes, including retail stores, churches, charities, and non-profits. Over 4,340 Texas businesses and homeowners were approved for long-term disaster loans totaling over $367 million after Hurricane Harvey.
If you are still trying to get fair payment for your hurricane losses, we can help. Simply fill out the form on this page today to contact the Voss Law Firm or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.