The Frozen Mess in Texas and What it Will Mean for Insurance Claims

Based on all the news from various media sources and real time reporting, this Texas weather event that caused power outages frozen pipe bursts and water damage is going to be a monster. Clients we have spoken with along with claim adjusters assigned to our losses are describing unprecedented conditions with damages to homes and buildings.

Primary reports are that this freeze and the resulting water and loss of power will exceed $20 Billion in damages, bigger than Hurricane Harvey that caused massive damages due to flooding in Houston and the surrounding communities. But this disaster covers the whole state of Texas, so I expect major upward adjustments of the cost of this 2021 big freeze.

The good news for folks who have insurance is that most of these losses unlike the flooding from Hurricane Harvey will likely be covered by their property insurance policies. As it stands now, most losses to businesses and homes will likely be from water due to frozen pipes and loss of perishables due to loss of power. Like all insurance losses, the terms and conditions of your policy need to be read and understood. As an example, some policies may have requirements that intake water valves must have been shut off before the freeze, for coverage to be extended. As always, pay attention to the details as you progress through the claim adjustment process. It would be hard for me to imagine that insurance carriers would be so callous under these conditions that people in Texas who have been going through such suffering be denied coverage because they could not find a water intake valve to shut off while they are freezing!

Turning to other issues Texans facing the business interruption component will be significant and for businesses that suffer a loss of income, policy language will be critical for a recovery of an economic loss. There will also be collapsed roofs, foundation damages, and assorted other perils that will result from the weight of water once frozen pipes thaw and water runs out of broken pipes. From there it’s anyone’s guess as to how all this temporary contained (frozen) water will impact the environment perhaps in the form of black water full of sewage.

And let’s not forget the huge commercial losses from failure of sprinklers systems in commercial spaces such as warehouses, shopping centers, apartment and office complexes’ etc. We have already had an independent adjuster (works for the insurance carriers) report back to us that he was way overloaded and could not take on any more work. And for those of us who have handled complex commercial losses, these are not for the faint of heart. They are complex, often driven by outside expert involvement such as accounts, salvage experts and qualified restoration firms. This will require professional loss management which is where we come in. Let’s face it, all of this loss recovery requires significant hands on time and attention, just at the time the policyholder needs to focus on getting the business up and back in operation, a daunting task in itself. With expert claim help from their own private advocate, it lifts one more burden from their shoulders.

So, what should property owners do now, while they wait for the expected damages to manifest in real time over the coming days and weeks?

First and foremost are the life, health, and safety concerns which should be the primary issues addressed by everyone. After the “all clear” directives are given by authorized officials allowing owners access to their property, the next best thing property owners should do is locate the water shut-off valve and make sure it is closed. When the pipes thaw, this will prevent water from the city lines (which are under high pressure) from surging into a home or business. But remember, it’s critical to check to see if electrical lines and or electrical appliances are not in any way compromised. This may be a job for a professional as electricity and water is a fatal combination.

If electrical power has been cut, it’s important to check to see if any items have been left on stove tops or other appliances are in the on position. I have seen many fires started that could have been avoided with a due diligence inspection by the property owner or a property management company representative.

So, what should folks who have insurance do once it is safe to return to their property? Based on the conversations we have had with adjusters who work for the insurance companies, they are all saying they are swamped with claims. So, it’s going to be awhile before inspections can be scheduled. Our advice given our many years in similar situations is to do emergency restoration, such as dry out of the building envelop. To the extent possible, salvage items that appear to be repairable or are of very personal value such as family photos or business records. But remember, keep records of everything you do with video and photographs. If possible, try to establish some type of communication with your insurance agent or the actual adjuster assigned to your file. Confirm phone calls in emails and or text messages. All this documentation will serve you well if any claim disputes arise.

As to making permanent repairs, it’s not advisable to do so until the insurance company adjuster has had an opportunity to inspect the damages or instructs you otherwise. And remember, be careful when asked to sign a contract by a company making promises about their ability to quickly get your property restored while at the same time telling you your insurance company will pay whatever they bill and there will be no money out of your pocket. This is a big red flag!

It should go without saying, that you should never give cash or a check to anybody based on a sales pitch. It’s almost a certainty you will lose your cash and your insurance policy will not likely pay you back for your loss of cash. Remember, your insurance company will only pay for your loss one time. They will not pay to fix mistakes by incompetent contractors or opportunists promising you the moon just to get your cash, or your signature on a contract that may result in them later having the ability to put a lien on your property.

As with other catastrophes we have worked, unique claim issues will present themselves, challenging all concerned. As we get more involved on the ground in this big Texas mess, we will provide updates on how the insurance adjusting process is proceeding both on the commercial and residential side.

If you are in need of a Licensed Public Adjuster to assess your pipe burst water damage claim or other damage from the winter storm consider hiring a claim specialist that works for you to navigate the insurance policy, deal with the insurance claim process, prepare detailed repair estimates, and ultimately work to negotiate a fair settlement recovery in order for you to properly fix your winter storm damage. You pay your premiums, so do not accept any low-ball offers! Call us today 214-396-5768 for a free claim review or contact us to submit a question to one of our public adjuster insurance claim experts.