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Tips for Recouping Fire Losses

October 2017
 
by Kate Lavin
 
 

San Rafael, Calif.—Insurance specialists with wine industry clients are fielding questions such as: Am I eligible to claim losses even if there wasn’t damage to my property? Do I have to accept grapes from areas that experienced smoky conditions?

Linda Kornfeld, vice chair of the insurance recovery practice group at Blank Rome LLP in Los Angeles, Calif., says the first step is contacting the insurance company and getting their approval before spending large sums of money. Second: Keep receipts for all purchases related to the fires.

While the insured should provide adjusters with all of the information they ask for, offering unrequested details can actually undermine an insurance claim and result in a lower payout.

“Stick to the facts rather than characterizing the facts,” Kornfeld advised. “For example, ‘We had 10 barrels of wine destroyed,’ as opposed to how you might value the wine that was in the barrels. It should just be facts without hypothesizing or projecting the worth.”

Kornfeld also said it’s important to keep detailed records of your conversations with the insurance company, adding: “Claims that are submitted early in these events tend to be paid early. Delay is not your friend in this circumstance.”

Alana Joyce, associate attorney at Hinman & Carmichael LLP, told Wines & Vines, “You can make a claim for any type of alcohol if you have paid federal excise tax on it.…You can get a refund or an allowance of credit.”

TTB is waiving tax penalties to those affected by the fires, and the California state Board of Equalization is offering emergency tax relief and an extension of up to three months.

Meanwhile: Vineyards and wineries may be able to collect on crop insurance for inability to harvest or smoke taint. The U.S. Department of Agriculture advises farmers: “Do not destroy evidence that is needed to support your claim without clear direction from the insurance company, preferably in writing.”

Loss of income
David Smith, insurance and risk-management consultant for Farella Braun + Martel LLP, said many business-interruption policies have ingress/egress coverage that applies when damage elsewhere prevents customers from getting to the business and spending money.

“Any time the business is shut down, whether it’s actually suffered damage or not, the business should be tracking all costs it’s incurring very carefully and keeping records,” said Tyler Gerking, partner at Farella Braun + Martel. “Those kinds of losses—even if there wasn’t actually damage to their property—might be covered, so keep in a file any costs they’re incurring and sales they’re losing.”

 
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