Supplemental Policy Can Fill Critical Coverage Gaps of Traditional Policies

Both residential and commercial lines of coverage often are filled with coverage gaps that can pose exactly the type of serious financial risk that policyholders purchase insurance to avoid.  The areas where the financial security of a policy might fall short include high deductibles, exclusions, coverage triggers, uncovered types of losses, and more.  Because these gaps can result in enormous financial losses, policyholders might want to shop around for supplemental policies that can help close some of these loopholes.

A recent form of wind coverage provides an example of how this type of supplemental insurance can fill critical coverage gaps that can result in enormous out-or-pocket expenses.  This new type of coverage is currently offered for businesses, but the company offering the policy plans to make similar insurance available for individual homeowners.    The Florida company offering the coverage currently makes the supplemental insurance available to large corporations and mid-size businesses.

The core of this special insurance involves using wind speeds during a storm as a trigger for coverage.  The carrier uses wind speed information produced by over a hundred monitoring stations.  When a named storm occurs, the network records the highest sustained wind speed with the information being certified by a catastrophe risk modeling company.  Because of the close correlation between the scope and significance of damage and wind speed, coverage is triggered if there is a named storm identified by the National Weather Service.  This efficient approach to triggering coverage means that many claims can be paid within days or weeks of the weather-related incident after submission of a claim and purported loss.

This specific coverage currently is offered in Tier 1 wind areas on the Southeast and Northeast coast with a premium cost of $10,000.  Some of the types of losses that can be covered by this form of supplemental insurance as opposed to a standard commercial policy include:

  • A range of losses excluded by traditional policies caused by wind storms
  • Forms of financial damage that do not meet the deductible threshold for traditional coverage
  • Forgone profits and other business interruption losses including losses caused by disruptions occurring in the period immediately preceding and following the storm

Another benefit of this special form of coverage is that the policies are being offered to businesses that historically face difficulty obtaining coverage.  Examples of industries that this coverage is offered to include but are not limited to the following: hotels, hospitality, energy, universities/colleges, country clubs, healthcare, utilities, infrastructure, energy, and many others.  The company offering the coverage claims that businesses like these and others can save billions in losses just in the form of damage that does not meet deductible thresholds.  Although this is just one form of supplemental insurance, this example demonstrates why business owners and individuals should carefully read their principle policy and determine what types of supplemental coverage might be advisable.

Our Miami commercial insurance claims law firm invites you to contact us if you are having difficulties with your insurance company.  Miami insurance claims lawyer J.P. Gonzalez-Sirgo handles claims disputes involving property damage under insurance policies in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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