Whether you own a single shopping center or have a portfolio of several strip malls, property damage insurance is key to a successful venture. Seasonal hailstorms pose a significant threat to shopping centers, and extensive damage can cause losses that total into the millions. Attorney Bill Voss examines the steps owners can take after a storm to get hail damage compensation that will allow them to reopen as quickly as possible.
Maximizing Hail Damage Coverage for Malls and Shopping Centers
The first thing owners must understand is that the amount they are able to recover through a property damage policy varies widely depending on the coverage options they have selected. Policyholders have a much better chance of securing full payment if their hail damage insurance includes:
- Replacement cost value. Roofs and windows are extremely vulnerable to hail damage. The sheer scale of a commercial property can require the replacement of several custom-made panels of glass, while hail damage to a roof can cause slow leaks that lead to water damage losses years after the initial storm. Unfortunately, owners who have selected an actual cash value (ACV) policy will receive payment after depreciation is subtracted from the roof, leaving the payment far short of the amount needed to make repairs. In contrast, an owner with a replacement cost value (RCV) policy should be issued the full amount necessary to replace lost items with like kind and quality.
- Grounds and landscaping. Most property damage policies will include coverage for the structure and outdoor signage, but may place limits on how much of the area surrounding the structure is covered. Insurers may refuse to pay for damage to trees, green spaces, parking lots, and gardens, leaving owners out-of-pocket for the costs of beautification of the grounds. To make matters worse, some insurers do not include grounds cleanup costs—such as removal of downed tree branches, broken light poles, shattered glass, and reseeding pockmarked lawns—as part of their property damage policies.
- Multi-peril protection. A single storm may bring hail, high winds, heavy rains, and electricity outages that can all combine to cause separate damage to your property. Insurers may deny coverage that is caused by multiple perils, especially if only one type of hazard is covered under the policy (known as concurrent causation). A strong commercial property insurance policy will cover the effects of any covered event, such as a hailstorm that damages the roof and allows rain to enter the structure.
- Policy extensions. Owners should check policies carefully when calculating the costs of cleanup and restoration. Optional extras such as hazardous materials cleanup (which can deter mold growth) may pay for the removal of broken glass or carpets and furniture ruined by water intrusion, while special equipment extensions can cover the replacement of high-value items (such as sound systems, electric billboards, and computer networks).
- Code upgrade coverage. Hail damage may be so extensive that a portion of the roof must be rebuilt—and if building codes have changed since the initial construction, the structure must be rebuilt in compliance with current ordinances. Code upgrade insurance pays for the increased costs of construction and installation of new utilities to adhere to modern building specifications, and may pay to replace outdated insulation or structural materials.
- Special event losses. Storms can have a drastic impact depending on when and where they strike—and a hailstorm that forces the closure of some or all of the shopping center before a major event can double the amount of your losses. Seasonal and special event insurance can replace lost income due to a covered event during a busy part of the year, such as the Christmas or back-to-school shopping seasons.
- Extended business interruption. Business interruption coverage is vital for replacing lost revenue during closures and building restoration. This insurance is even stronger when combined with umbrella insurance, which provides an additional amount for a covered loss above and beyond policy limits, and can prevent permanent closure or even bankruptcy after a large loss.
If you are having trouble getting the full value of your hail damage claim from your insurance company, the Voss Law Firm can examine your policy, investigate the details, and fight on your behalf. Simply fill out the contact form on this page today or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.