SANDY CLEANUP TIPS
Happy New Year to all of you!
By now, most of you are entering the difficult stages of adjusting losses incurred during or as a result of Superstorm Sandy, the post-tropical cyclone that struck our area in late October, 2012. (Sandy made landfall in New Jersey on October 28th.) Here are a few tips that may prove helpful to you.
OSHA and MOLD
Believe it or not, you may get some assistance in dealing with mold remediation issues from the plethora of regulations promulgated by the U.S. Occupational Health & Safety Administration. Along with their usual concerns for safety, including falls and construction accidents, OSHA has regulations and recommendations for cleaning up mold contaminated areas. You can find these, in detail, on the OSHA website, www.OSHA.gov. They recently issued a "Mold Hazards during Hurricane Sandy Cleanup" fact sheet. OSHA has guidelines for what to clean and how to clean. Notably, they recommend that porous materials be discarded. If you encounter resistance from a carrier regarding mold remediation, you may find support for your position in the OSHA regulations. If we can help, please call.
You may find that debris removal costs have skyrocketed and your insureds may not be able to get rid of their debris for the prices that were normal prior to the storm. This may lead to difficult negotiations with the carriers. Obtaining an actual proposal from a contractor who has an outlet for disposal of the debris may prove to be preferable to an estimate based on a percentage of the loss.
If you find an outrageous situation of price gouging, you can contact the State of New Jersey, which set up a special hotline for reporting price gouging. The numbers are 862-209-0130 or 973-220-3474.
As many attorneys have already commented, insurance brokers may be liable to their insureds if they did not adequately advise them about the lack of coverage for flood damage under their property policies, the availability of flood insurance and the broker's ability to secure it for them. Although the number of property owners in flood prone areas who simply do not know anything about flood insurance is small, there are some. While the cost of flood insurance may be prohibitive for some owners of older buildings, brokers should have detailed file notes confirming their discussions with their customers about flood insurance and the customers' election to decline this protection. Many owners will finally realize that self-insurance is not without its cost!
Many of the carriers have adopted a business model in which they out-source their catastrophe response. Companies have sprung up that purport to be able instantly to send hundreds of adjusters to a catastrophe location to handle the resulting claims. You have already encountered these folks and have your own opinions about them. I am sure many are good and decent people with substantial adjusting experience. Others, perhaps not so much. If you encounter difficulty with one of these adjusters, remember that the insuring company may have an in-house review procedure in place, whereby their usual personnel review the "storm troopers'" work for accuracy, valid pricing, etc. You can almost always increase your insured's reimbursement by getting a second look at the adjustment by local personnel once the dust has settled.
Remember, N.J.A.C. 11:2-17.10, applicable to non-commercial policies and commercial policies with less than a $10,000 annual premium, addresses hidden damage and provides:
"Unless the question has been specifically negotiated, the insurer remains liable for hidden damage directly related to the loss giving rise to the claim subject to policy terms, conditions and limits."
As we have discussed in the past, be very careful if the carrier tries to induce negotiations to release claims for hidden damage. Check the forms of proof of loss that may be tendered to you for language releasing claims for later discovered damage.
Also note that N.J.A.C. 11:2-17.5 prohibits the carrier from requesting a release that extends beyond the subject matter that gives rise to the claim payment.
As always, if you or your insureds encounter any difficulties in the adjustment of these losses, please feel free to contact me by telephone at 973-538-4100 or by email at email@example.com. We are here to help!