Insurance broker braces for 'mad rush' of DVM claims

CHICAGO — Initial estimates from Hub International reveal 70 practices along the Gulf Coast region likely will generate damage claims following what appears the most destructive hurricane to hit North America since the early 1900s.

Hub International is the broker and administrator for property, casualty and other insurance programs sponsored by the American Veterinary Medical Association's Professional Liability Insurance Trust (PLIT). Its estimates are based on policy holders' zip codes.

To make a claim

At presstime, area communication systems remained inoperable, but Executive Vice President Mike Ahlert expects when phone lines open, calls will "flood in." The brokerage firm holds roughly 12,000 DVM policies ranging from automobile and homeowner's insurance to practice liability and business interruption loss.

The Hartford, the Hub International carrier for the PLIT-sponsored business owner's insurance package reportedly had emergency teams in place to assess damage, but adjusters could not yet reach affected areas. No information was received by Liberty Mutual, the carrier for the PLIT's personal lines of insurance, at presstime.

Early industry estimates range from $9 billion to $26 billion in losses, Mitchell says. Widespread belief that many Gulf Coast residents were too poor to afford insurance lends to the wide-range estimate. Veterinary practices will make up just a fraction of the losses, Mitchell adds.

"The only thing they can do right now is report their claims to our 800 numbers and try and be patient," he says. "As soon as the phone lines open, we expect a mad rush. Hopefully everyone will get taken care of right away."

Underinsured

That won't happen for many home and practice owners who likely will discover their property is covered by the wrong type of policies. Hub International does not offer flood insurance. And while mortgage companies along the coast demand customers carry it, some landlords might own property outright. That means flood coverage would be an extra, a cushion DVM renters might not enjoy.

"I would say a lot of people in that area don't have flood insurance," Ahlert says. "Even coverage for wind and hurricane damage does not cover flooding. A lot of veterinarians are renting facilities. You really can't make an assumption on flood coverage."

Salaries continue

The good news, Ahlert says, is holders of Hartford's business owner's insurance package are covered by the carrier's business interruption loss, which picks up all payroll expenses for up to one year or 30 days after the rebuilding of the practice's physical premises is complete. There's no limit on salary amounts; payments are based on earnings.

Employees using direct deposit will see money right away, Ahlert says, but those who rely on paper checks might have to wait considering the mail system in many areas is at a standstill.

"Business interruption loss doesn't get used very often, but in this case, I think it will probably bring a lot of relief," Ahlert says. "These people are still going to get a paycheck."