Navigating Post-Storm Insurance Obligations

The 2025 hurricane season begins June 1, and it’s projected to be an above-average year for these intense storms. The 2024 hurricane season left a trail of destruction across the United States, with early estimates placing total damage and economic loss at nearly $500 billion.

For owners and managers of multi-family housing communities, these storms can trigger not only major structural and financial impacts but also a prolonged and complex insurance recovery process.

While insurance is designed to serve as a financial safety net, recovering under a policy is not automatic. Every property insurance policy comes with post-loss obligations that must be met by the insured. Failing to follow those obligations—even unintentionally—can jeopardize coverage. Understanding these responsibilities in advance, and responding quickly and thoroughly after a loss, is essential to preserving your claim and ensuring you can recover as fully and efficiently as possible.

Step 1: Timely Notice of the Claim

The first and most fundamental obligation is to notify your insurance carrier of the loss. Insurance policies often use language such as “prompt notice,” “immediate notice,” or “as soon as practicable.” These terms carry significant weight, as courts closely examine whether a delay in notice prejudiced the insurer’s ability to investigate the loss.

In the aftermath of a storm, there may be uncertainty about the full extent of the damage, but this should not delay the initial notice. Even if the damage appears minor or isolated to a few units, it is best practice to notify your carrier immediately. A short email or online portal submission stating that you have observed storm-related damage is typically sufficient to meet the notice requirement. You can always supplement with more details later.

Delays—especially those measured in weeks or months—can be fatal to a claim. Courts often side with insurers who argue that late notice impaired their ability to adjust the loss. When in doubt, report early.

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Step 2: Mitigating Further Damage

Insurance policies universally impose a duty to mitigate. This means that after the storm, the insured must take reasonable steps to prevent further damage. The policy may read: “Take all reasonable steps to protect the covered property from further damage.” This includes prompt action to secure leaking roofs, broken windows, and other compromised areas that could worsen with time or exposure.

Mitigation presents unique challenges in a post-storm environment. Qualified contractors are quickly overwhelmed, and pricing for services like roof tarping and water extraction can skyrocket. That’s why it’s advisable to make arrangements before the height of the hurricane season with a reputable mitigation contractor who agrees to prioritize your community in the event of a disaster.

If you take steps to mitigate, notify your insurance company of what work is being done and when. A brief, written update—such as “A roofing contractor will be installing a tarp over Building C’s roof to prevent water intrusion”—can help avoid disputes down the line.

Step 3: Respond to Documentation Requests

Another critical obligation is to cooperate with your insurer’s investigation. After you report the claim, the insurer will typically issue requests for documentation. These may include:

• maintenance records
• repair history
• inspection logs
• leak logs

These requests are often broad and voluminous. Failing to respond in a timely manner, or providing incomplete or delayed responses, can open the door to denial. Insurers may argue that your failure to cooperate “prejudiced” their ability to investigate, giving them grounds to reduce or deny payment.

To protect your position:

• track what documents you’ve submitted
• note when documents are not available or do not exist
• retain proof of submission, especially when using online portals

Example format for responding:

1. Roof maintenance records
    ✓ Attached.
2. Window maintenance records
    – Requested from contractor, will forward upon receipt.
3. Landscaping maintenance records
    – None available.

Step 4: Document Everything

Good documentation is the backbone of a successful claim. Communities that maintain detailed records often fare better in disputes. Document:

• the damage (including interior and exterior photos)
• all mitigation steps taken (with receipts and contractor invoices)
• correspondence with contractors and insurance representatives
• tenant communications where applicable

Ask tenants to send photos of storm damage inside their apartments as well. These images provide helpful supporting evidence and can be particularly valuable if adjusters are delayed in visiting the site.

Maintaining this documentation isn’t just helpful—it’s critical when confronting common carrier defenses like “failure to mitigate” or “lack of maintenance.”

Step 5: Begin Repairs to Recover Depreciation

One of the most commonly misunderstood aspects of the insurance recovery process is how and when the insured receives Replacement Cost Value, which includes the depreciation withheld from the initial payment. While your policy may insure the property on a replacement cost basis, insurers generally pay only the Actual Cash Value up front. The remaining amount—the depreciation—is recoverable only after certain conditions are met.

Most policies contain language requiring two things:

1. The damaged property must be repaired or replaced; and
2. The repairs must be completed as soon as reasonably possible after the loss.

This means communities cannot recover full policy benefits without actually beginning repairs. Simply being under contract is no longer sufficient in many newer policies. If the work is not started, or if delays occur without justification, the insurer may refuse to release the depreciation amount, leaving the insured with only partial recovery.

This creates a practical challenge: To access the full value of the claim, you often must begin repairs before all funds are in hand. That means you must be financially prepared to cover the difference temporarily.

Adding to this burden are hurricane deductibles, which are commonly calculated as a percentage of the building’s insured value. For example, a 5 percent deductible on a $10 million building equates to $500,000 that must be funded directly by the insured—regardless of the total damage. Deductibles are applied before any reimbursement, meaning you must absorb that amount before insurance dollars contribute.

Taken together, the RCV requirement and the deductible amount make clear that out-of-pocket costs are unavoidable in most significant storm losses. Whether through reserves or credit facilities, you should have a financial plan in place to:

• begin repairs promptly (unlocking RCV eligibility)
• cover the deductible
• bridge any funding gaps until the insurer releases full payment

Communities that delay repairs or lack financial readiness risk leaving substantial insurance benefits on the table—and may jeopardize the long-term recovery of the property.

Recovering after a hurricane is never easy, but it becomes significantly more manageable when owners and managers understand their post-loss obligations. Acting quickly, complying with all policy dutie, and documenting thoroughly are essential to protecting your claim.

Kyle S. Bugden is an attorney at Ball Janik LLP focusing on representing homeowners’ associations in both insurance and defect claims. Kelly M. Corcoran is a partner at Ball Janik LLP focusing on resolving complex insurance coverage disputes on behalf of individual and corporate policyholders.