Charley Business Claims Larger than Expected

Charley Business Claims Larger than Expected

By Matt Brady

NU Online News Service, Aug. 26, 4:27 p.m. EDT?Claims filed by businesses in the aftermath of Hurricane Charley have been greater than were anticipated; accounting for approximately 40 percent of the nearly $6.8 billion the insurance industry is expected to pay out, an insurer services firm said.

Although commercial claims represent a significantly smaller percentage of the number of claims filed, approximately 20 percent according the Insurance Services Office's Property Claim Services, business claims are "typically more expensive than homes," said Don Griffin, vice president of commercial lines for the Property Casualty Insurers Association of America.

Some of Charley's unpredictable moves may have also added to the costs for businesses, as the storm came ashore to the south of where many experts predicted it would land.

Additionally, Mr. Griffin noted that a "little spin-off" of squalls caused a significant amount of damage in the Orlando area, which is a major tourist attraction. "That little squall line that spun off is actually what caused a lot of the damage," to the area, Mr. Griffin said.

However, Mr. Griffin noted that dealing with a major storm such as Hurricane Charley should motivate business owners to fully examine their insurance coverage and options.

"Many of the businesses in the storm's path had to shut down due to widespread power outages," he said. "The standard commercial insurance policy does not cover losses due to 'off-site' power outages and typically, business interruption coverage does not cover external power outages.

"Fortunately, insurers do offer optional business interruption coverage that will cover certain losses in the event of a power outage," he said.

Meanwhile, the industry will now have to cope with several new rules and regulations approved by the Florida Cabinet, which also serves as the state Financial Services Commission, designed to help those policyholders victimized by the storm.

Under the guidelines passed to respond to Charley, insurers will have to observe a 60-day grace period on premium payments and non-renewals for homeowners insurance. Mr. Griffin said that the industry has raised a number of questions regarding the new rules, which also establish a 60-day moratorium on insurance cancellations following the completion of home repairs.