Wednesday, October 11, 2017

Puerto Rico After Hurricanes Irma and Maria

On September 6, 2017, Puerto Rico was hit by Irma, a massive category 5 hurricane that was on of the strongest storms ever recorded in the Atlantic. Two weeks later, on September 20, hurricane Maria passed directly over the island with even more devastating effects. Puerto Rican Governor Ricardo Rossello called Maria "the biggest and potentially most catastrophic hurricane to hit Puerto Rico in a century."


Thursday, October 5, 2017

Insurance Bad Faith Under Puerto Rico Law

Last month, as Hurricane Maria bore down on Puerto Rico, we reposted our Puerto Rico claims checklist and an analysis of causation under Puerto Rico law. In Maria’s devastating aftermath, many Puerto Ricans are still focused on necessities, and filing an insurance claim for damage to their home or business is not top of mind. But as recovery efforts gain momentum, the claims will begin to come in. Now is the time to review our posts from last month and consider how Puerto Rico law may apply to handling Maria insurance claims.


Tuesday, September 19, 2017

Maria – Re-Post of Puerto Rico Claims Checklist

With the Imminent Arrival of Hurricane Maria in Puerto Rico, we are re-posting our claims checklist for Puerto Rico.

Maria - Concurrent Causation in Puerto Rico

While Puerto Rico was spared a direct hit from Hurricane Irma, it now appears it will face the full brunt of Hurricane Maria. Maria is projected to strike Puerto Rico as a Category 4 Hurricane. Many of the same concurrent causation issues that we predicted may occur with Irma are also likely to exist with Maria and may be even more pronounced with the increased severity of damage from Maria.

Earthquakes & Hurricanes in Mexico (Any End in Sight?): Tips for International Insurers

A powerful 8.1 magnitude earthquake struck southern Mexico late Thursday, September 7, 2017. According to the U.S. Geological Survey, the epicenter of the earthquake was in the Pacific Ocean off the coast of the state of Chiapas – the southernmost state in Mexico. Because of the magnitude of the quake, its effects were felt throughout Mexico and as far north as Mexico City – 600 miles from its epicenter. Approximately 50 million people across Mexico felt the tremors from the quake. The earthquake, one of the most powerful ever recorded in Mexico, toppled hundreds of buildings, and killed at least 61 people.

Thursday, September 7, 2017

Concurrent Causation in Puerto Rico

While Puerto Rico was spared a direct hit from Hurricane Irma, it was lashed by Irma’s wind and experienced significant amounts of rain that will likely lead to flooding. There may also be damages arising from storm surge along the Northern Coast. Reportedly, more than 1 million people are without power. Many policies may exclude flood and limit or exclude losses arising from power interruption. Combined with the significant wind damage that is expected, it is inevitable that disputes over the extent of covered versus non-covered loss will arise.

Wednesday, September 6, 2017

Irma – Puerto Rico Claims Checklist

With the Imminent Arrival of Hurricane Irma in Puerto Rico, Insurers Should Keep in Mind the Following Claim Handling Requirements from the Puerto Rico Insurance Code 
  • Response to Notice of Loss – 15 Days. Acknowledge the claim in writing and commence investigation within 15 days. 26 L.P.R.A. §2714 
  • Provide the Insured with a Copy of the Policy – 10 Days. Insurer must provide a copy of the policy within 10 days of being requested to do so. 26 L.P.R.A. §2703a 
  • Investigation and Resolution of Claim – Less than 90 Days after Notice. The investigation, adjustment and resolution of any claim must be done in the “shortest reasonable period of time”, but no more than 90 days. 26 L.P.R.A. §2716b(1) 
  • Document Extension Needs. If a claim cannot be completed within 90 days the claim file should contain documents detailing the existence of just cause to exceed the 90 days. 26 L.P.R.A. §2716b(2) 
  • Resolution of a claim means the full payment of the claim, the written and duly justified denial of claim or closure of the claim for non-cooperation. 26 L.P.R.A. §2716c. 
  • If an insurer has “well grounded knowledge” of any fraudulent acts as part of a claim submission, the insurer is required to report that information to the Insurance Commissioner. 26 L.P.R.A. §2726 
Additional Considerations:
  • A reservation of rights should be issued as appropriate. 
  • Civil Authority – Mandatory evacuations may be issued in advance of Irma. 
  • Service Interruption – Power and telephone/cell service may be disrupted. 
  • Sue and Labor – Businesses may shut down operations in advance. 
  • Adjuster licensing – Puerto Rico requires all adjusters and public adjusters to be licensed in Puerto Rico. However, the Insurance Codes provide that no license from Puerto Rico shall be required of a nonresident independent adjuster for the adjustment in Puerto Rico of a single loss or of losses arising from a catastrophe common to all such losses. 26 L.P.R.A. §952(3). The Commissioner may also grant a special emergency permit as adjuster to any person qualified for adjusting losses arising from a general catastrophe after the presentation of the application for the special permit. 26 L.P.R.A. §952(4). 
  • Flood hazard zone areas—Areas identified on the Flood Insurance Rate Map can change so be aware of applicable policy limits by hazard zone. 
  • Flood and Wind sublimits.