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Business insurance claims and grace periods during the coronavirus outbreak, 4.1.20

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This information has been provided to the Washington Hospitality Association by its partner Parker, Smith & Feek.

During the coronavirus outbreak, should you file an insurance claim?

Most insurance policies, including the policy Parker, Smith & Feek issues to business insurance program members, includes language regarding virus/bacteria/communicable disease, which limits or excludes coverage for these events.

Nonetheless, the recommendation is to submit a claim for formal coverage determination from the insurance carrier as every policy is different and needs to be evaluated on its own merits. One important consideration in this recommendation is that if FEMA or other forms of government relief become available, these agencies may require evidence of an attempt to file a claim for insurance coverage and the carrier’s coverage response.

Getting a coverage determination may speed up any government relief that may become available. The outcome of the claim may not necessarily result in a claim payment but documenting the coverage position of your insurance company is a best practice. It is also good practice to talk with your broker prior to filing another formal claim if you have submitted other claims or have claims issues for protection of non-renewed during the next renewal term.

Washington insurance commissioner announces 45-day premium grace period

On March 25, 2020, the Washington State insurance commissioner mandated that all insurers offering property and casualty policies in the state must ensure policyholders retain coverage during Washington state’s coronavirus state of emergency. 

According to a news release from the Washington State Office of the Insurance Commissioner, the order requires all insurance companies selling property and casualty policies in our state to: 

  • Provide a grace period for policyholders to pay their insurance premiums
  • Waive fees related to any late payments, including late fees and reinstatement fees
  • Refrain from canceling any policy for nonpayment of premium, unless the policyholder requests the policy to be canceled

The order will remain in effect for 45 days, until May 9, 2020.

If you are anticipating having difficulty paying insurance premiums, it is recommended that you contact your insurance company directly and it will assist in making alternative payment arrangements per the order issued.