As a dealership owner, your commercial property damage insurance probably covers flooding in your building and lots caused by a broken pipe or water main. However, these policies do not cover flooding caused by adverse weather events such as Hurricane Harvey. Attorney Bill Voss explores how Texas business owners may recoup their losses and prevent the total loss of their car dealerships.
Car Dealerships May Be Covered Under a National Flood Insurance Policy
Coverage for flood damage caused by disasters is typically not included on a standard property damage policy. In most cases, the only way to get compensation for weather-related flooding is through the National Flood Insurance Program (NFIP). Commercial property owners may receive up to $500,000 in property damage and an additional $500,000 for lost inventory with a NFIP policy.
A dealership that is protected by NFIP coverage may recoup the costs of:
- Storefront and lot damage. Policies cover damage to the building and some contents, including flooring, carpets, walls, displays, and doors and windows. However, coverage for basements or other underground areas may be limited or excluded.
- Lost utility systems. Flooding can wreak havoc with a building’s electrical, plumbing, and HVAC systems, which will often need extensive repairs.
- Damaged inventory. Cars are not build to cope with sitting in several feet of water. Cars that may be recovered will need to be cleaned and repaired before they can be sold. Other vehicles may be salvaged for parts, and many are claimed as a total loss.
- Cleanup. When flood waters recede, they often leave debris, silt, and mud behind. National flood policies pay for tree and debris removal as well as professional drying and sanitation services for the affected property.
Could I Get Loss of Income Coverage from NFIP?
Federal flood insurance policies do not include relief for business interruption after a flood. However, the National Automobile Dealers Association Foundation does have an Emergency Relief Fund that assists dealerships with increased costs due to flooding, and some private policies may have clauses that allow temporary income replacement.
If your insurer is attempting to deny your flood damage claim, we can examine your options to determine how much you may be owed. Fill out the form on this page today to contact the Voss Law Firm or order a free copy of our book, Top 10 Mistakes You Cannot Afford to Make When Filing Your Insurance Claim.
