In­surance night­mare

The Citizen (KZN) - - WORLD - 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 (R14 300) per month for cov­er­age. But af­ter he filed a claim, he said the United States unit of Zurich In­surance Group AG, 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 United States with in­creas­ing fre­quency. Risk-mod­el­ling firm AIR World­wide pre­dicts losses to all prop­er­ties from the flood­ing in Texas alone will be $65 bil­lion (R857 bil­lion) to $75 bil­lion (R988 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.

Arnold is re­think­ing his cov­er­age.

“I’m go­ing to sit down with my in­surer and dras­ti­cally cut my in­surance,” he said.

“If my of­fice burns down or a tor­nado hits it, I want cov­er­age for that,” Arnold said.

“But if peo­ple come in my of­fice and steal my glasses, I’ll pay for that.” –

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