Information Release



Contact:   Hugh Strawn




Date:         April 10, 2015



Filing Your Insurance Claim after the Tornado

Information for Policyholders with Damage from Spring Tornadoes


Homeowners   -   Commercial


Insurance claim preparation is an important part of the recovery process for all homeowners, renters, and business owners whose property has been damaged by Spring tornadoes.  “Several types of property and casualty insurance will be involved in helping to rebuild the damaged communities following a catastrophe,” said Hugh Strawn, Vice President Catastrophe Services for the Property & Liability Resource Bureau.


Areas with Storm Damage in the South & Midwest

Thursday, April 9 to Friday, May 10, 2015

PLRB Catastrophe Services Occurrence Tracking Chart


Homeowners and Renters Insurance


“For the homeowner whose house was damaged by the tornado, the repairs will be a priority in the weeks ahead,” Strawn noted. “The insurance policy will help pay for those repairs.”


Some of the basic coverages of homeowners and renters policies include:


Homeowners insurance pays for

Wind damage

Rain damage from rain entering through a wind- damaged area





If these damages occur, the policy pays for

Emergency repairs to prevent further damage

Additional Living Expense

Debris removal

Repair or replacement of the insured property


“Sometimes a policyholder is confused or unsure of the coverages purchased when the insurance policy was obtained from the insurance agent,” said Strawn. “It is important to the recovery process for each policyholder to know what those coverages are and how they apply to the recovery from the tornado.”


“The coverages may be subject to limitations” he noted. “But a policyholder may easily determine the insurance coverages and policy limitations by:


            • reading the policies

            • calling the insurance agent

            • asking the insurance adjuster


Prepare an Inventory!


Help speed the claim settlement by making a list of damaged property in each room.


For each item include:

-   brand name

-    model number

-   Age

-   purchase price

-   place of purchase

-   cost to replace


Filing a Claim


“Filing the insurance claim needs to be done as soon as possible,” Strawn said.  “Typically after a storm, people with less than total damage will often wait before notifying their agent or insurance company. I have seen this occur all over the country,” he continued, “as those will less damage want to give those with extensive damage priority.  But insurers are set up to prioritize those calls quickly and efficiently and get the claims funds flowing to all policyholders who sustained damage.”


The following tips on filing the claim are provided to help people with damage through the claims process.


    Call the insurance agent or company claim telephone number immediately

    Preserve and protect the property from further damage

    Save the damaged property until the adjuster has seen it

    Photograph damaged property for the records

    Prepare a room-by-room list of damaged or destroyed property

    Keep an accurate list of all additional living expenses such as meals, motel rooms, etc.

    Keep an accurate list of all supplies purchased for emergency damage control

    Leave a forwarding address, e-mail address, and the telephone number(s) with the agent or adjuster


Business Insurance


“Many businesses have been damaged or destroyed by the tornado,” continued Strawn. “The repairs to commercial space and business property, compensation for destroyed inventory, and recovery of lost business income will be a priority for all business owners in the weeks ahead.” 


“The commercial insurance policies, in cooperation with good management skills, will help businesses survive,” he observed. “The insurance adjuster will help business owners through the process of recovery. It is recommended that business owners discuss with their adjuster, whose professional experience will be of great value to them, the best way for the business to proceed with its recovery.”


Coverage Review


Some of the basic perils the business insurance policy may cover include damages caused by wind, hail, rain water entering through openings caused by the storm, fire, and lightning.  The business owner should be sure to check the specific business coverages with the agent or the adjuster. Business insurance policies typically cover the following:


·         Building ‑ Damages caused to the structure by the disaster, such as to roofing, siding, windows, and some signs.

·         Contents ‑ Damages caused by the disaster to the business equipment and property, usually inside or close to the building.  This includes the stock or inventory.

·         Business Interruption ‑ Replaces the income the business would have generated if it hadn’t been temporarily shutdown by the disaster.

·         Extra Expense ‑ Provides additional funds to meet emergency costs necessary to keep the business open and operating following the disaster.


The Steps to Recovery after the Disaster


Report the loss right away


Call the insurance agent, broker, or insurance company claim telephone number immediately to report how, when, and where the loss or damage occurred.  Be prepared to provide a reasonably accurate description of damages.


To control damage to the stock


    Dehumidify the stock area after the building has been made weather tight.

    Separate the damaged stock from the undamaged stock.

    Contact a salvor to inspect damaged stock and determine any salvage value.

    Remove all debris as soon as possible after receiving authorization from authorities and the adjuster.

    Have the stock storage area cleaned. 

Note:  It may be necessary to move the undamaged stock to another location during the clean up.

    Consider making either a public or a limited announcement to customers advising of any temporary changes being made to continue operations.


If the business owned the building and it is damaged


    Inspect the building to determine its safety and the extent of damage.  Architects, contractors, and building officials may be of help.

    Board up the building and cover holes in the roof to make it weather tight and reduce additional damage.

    Secure the building from casual entry or post guards.

    Restore the utilities as soon as possible.

    If necessary, install a temporary electrical generator.

    Order a dumpster for debris.

    Use temporary signs to redirect parking or traffic access.

    Partition the building if some areas are not usable.

    Locate alternative location if the building is not usable.


Business Interruption


“Keeping the business operating in a fashion that is as close to normal as possible is crucial to its recovery,” Strawn said. “While business interruption insurance will pay for the covered losses, the only chance of surviving and prospering is to keep serving customers.” Insurance adjusters know from many years of experience in helping businesses recover from disasters that there are some operational strategies and emergency recovery procedures to follow as you pick up the pieces.


    If possible, continue conducting business operations as normally as possible, making business decisions as if there was no insurance policy. Customers will appreciate a business owners efforts to provide them continuing service.


    Start a physical inventory as soon as possible. It may be required by the insurer. Employees or a professional inventory service may take the inventory. Discuss with the adjuster various options and get his or her opinion on the best method for conducting the post‑tornado inventory.


    Organize the business books and records. The adjuster will need to examine these in order to evaluate the damages.


    If portions of the inventory are lost or damaged beyond recognition a "book inventory" will be needed to evaluate the loss. It is important that any inventory shipments received or sales made after the disaster is documented separately from pre‑tornado business.


Business Interruption Basics


    Extra expense coverage is designed to help the business continue operations.

    Loss of income provides for the loss of net profits the business would have earned, including those expenses that continue during the period of business interruption.

    Business interruption is usually activated when the business is directly damaged by a covered peril such as the tornado at the insured premises.

    Most policies do not cover losses resulting from interrupted water, electrical, and natural gas supplies, or telecommunications service, unless the interruption occurs on the premises.


Expediting the Business Interruption Claim


    Prepare a list of steps required to promptly resume operations on a full, or even a partial, basis.

    To help calculate the amount of business income loss the adjuster will need:

·    Historical sales records

·         Income and expense information as shown in recent profit and loss statements and/or income tax forms

·         Other business records that might assist in projecting what profits would have been had business not been interrupted.

    Consider various ways to reduce continuing business expenses. The adjuster will review this with the business owner.


Things to do immediately


    Close out the books as of the date of the loss and maintain a separate, accurate record of any sales or operating expenses that continue after the loss.  Remember that the adjuster will need to verify these expenses as part of the claim process.

    Maintain accurate records for extra expenses incurred to expedite the resumption of operations.

    Create a written record of any communications received regarding orders to evacuate, including who ordered the evacuation, date, and time.


Some ways to reduce loss of business income


  Carefully consider ways to continue business operations, even if on a partial basis. Consider ways to expedite repairs and replacement of destroyed inventory.

  Rent another temporary facility if the current location is not serviceable.

  Enlist the support of non‑competitor business associates, if they can help maintain service or supplies to the customers.

  Downsize the operation if a portion of the building remains serviceable.

  Consider sending printed materials to customers describing the plan to continue operations during the restoration period.

  Act quickly to restore and protect the inventory, but keep damaged property for the adjuster’s inspection.


The Property & Liability Resource Bureau is a not-for-profit association of property and casualty insurance companies.  It is located in Downers Grove, Illinois.