Two questions that always arise whenever a natural disaster is imminent are, do I have any coverage for expenses associated with emergency evacuation orders or any coverage for the cost to protect my property in advance from damage?
Coverage for Emergency Evacuation Expenses
ISO HO policies generally respond to necessary and reasonable additional living expenses incurred as a result of covered direct damage that make the premises unfit to live in. In addition, time-limited coverage is provided for expenses incurred if a civil authority prohibits access to the premises following covered direct physical loss to property off premises. In other words, the only coverage provided for expenses associated with orders of a civil authority is one triggered AFTER loss occurs. There is no coverage in ISO forms (including BI/EE coverage in commercial business income forms) for pre-loss evacuation orders.
It’s possible that you may have carriers that have options for this. In fact, in the case of HO programs designed for high net worth clients, private client expert Tim O’Brien with Assurex Global advises that evacuation expenses are commonly included, with varying sublimits and time restrictions. For example:
“If you are forced to evacuate your residence premises or a civil authority prohibits you from use of the residence premises, we will reimburse you for the reasonable increase in living expenses incurred by you so that your household can maintain it’s normal standard of living for up to 30 days. The most we will pay for this coverage is $50,000.”
Do your carriers offer such coverage?
Coverage for Pre-Loss Preventative Measures
ISO and most other commercial and personal lines carriers require that property be protected from further loss and the policies cover reasonable expenses to do so. However, the key word is “further.” In order for preventative expenses to be covered, a loss must have first occurred. So, for those who incur expenses, for example, to board up windows to prevent interior windstorm and rain damage, there is no coverage under ISO forms.
Given that doing so could save the insurer tens of thousands of dollars or more, it would seem to be reasonable that such costs could or should be covered, but the reality is that they are usually not. This is the type of issue often addressed by the Big “I”’s technical affairs advocacy with ISO and other organizations, so it is perhaps something that could be pursued in the future. In the meantime, if you are aware of carriers you represent that include or offer this type of coverage, feel free to Comment below.