Resources

The Storm Before the Storm: How Hurricanes Can Disrupt Your Insurance Process

For states along the Atlantic and Gulf Coasts, hurricane season presents varying challenges for businesses each year. During this time, the insurance industry frequently emphasizes the importance of disaster preparedness—a crucial topic that often gets overlooked. However, one major concern that isn’t typically discussed is the difficulty in obtaining insurance during storm season, which can be severely restricted or entirely unavailable.

When a hurricane or named storm approaches, many insurance companies impose a temporary pause on new policy applications and coverage binding. This is mainly to limit their own risk, leaving businesses exposed and unprepared to handle potential damages from strong winds, flooding, and other hurricane-related hazards. Without the ability to secure coverage, business owners may face significant financial loss since standard policies usually don’t cover natural disaster damages unless they were in place before the storm forms. Additionally, many established businesses might assume that their insurance will automatically renew, but this is not always true. With natural disasters inflicting billions in damages annually, many insurers are looking for ways to avoid paying hurricane-related claims, which includes not automatically renewing policies during the hurricane season.

When seeking new insurance or renewing an existing policy, it’s crucial to remember that if the storm has a name, it will likely impact your ability to secure coverage. So if you have the upcoming need to bind an insurance policy, make sure you take measures and reach out to your broker early to ensure you can bind your policy before its too late. This is especially true if you’re in an acquisition, as the inability to bind insurance can delay a closing. If you have questions or concerns, the insurance division at Aline Capital is here to help, so please don’t hesitate to reach out.