Loss Mitigation

In the aftermath of hurricanes Katrina and Rita, many property owners have found themselves struggling with their insurance companies over the pre-storm condition of their property. Lacking sufficient documentation of the pre-storm condition of their residential or commercial property, many property owners are finding that their insurers denying storm damage claims, citing a pre-existing condition. Equally as frequently, insurers offset the value of damage claims by using depreciated values of the insured property as a basis for claim adjustment. In cases where the pre-storm condition of the property has been well documented, this has not been the case.

One of the primary arguments made by insurance companies in denying damage claims in the aftermath of hurricanes Katrina and Rita has been that the damage was “pre-existing”; the result of long-term differential settlement. This is an easy argument for the insurers to make due to the soil conditions of our community. It is equally difficult for the individual property owner or their experts to refute such claims after-the-fact. The best defense against claims of pre-existing damage is thorough documentation of the existing condition.

Anyone who has lived in the Greater New Orleans Metropolitan Area for any length of time is at least somewhat familiar with settlement. In very general terms “settlement” and/or “differential settlement” is the shifting of a structure caused by consolidation (shrinking) and/or expansion (swelling) of the structure’s supporting soils. Various types of foundation systems have been designed to address the problem of settlement in compressible and expansive soils. Generally, foundation systems supported in deeper soil layers (piles, drilled piers, etc.) perform better that foundation systems supported in the upper soil layers (spread footings, chain walls and masonry/block piers).

In most cases, a written Engineer’s Report, which includes a detailed description of the property, a relative elevation survey and photographic documentation, is sufficient to establish a “baseline” or “snapshot” of the current condition of the property. We recommend that the property be re-inspected every two years or so, or as improvements are made to the property. A copy of the Engineer’s Report should be provided to your insurer to have “on file” in the event of catastrophic loss.

As you make repairs or substantial improvements to your residential or business property, don’t allow yourself to become caught in a situation where you are unable to provide proof of the pre-existing condition of your property in the event of a catastrophic loss.

Loss Mitigation Services

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