AUSTIN (KXAN) — Weeks after the February winter storms in Texas, some local businesses are still in a battle with their insurance companies.
“The winter storm came at really kind of the worst time possible,” said Mason Ayer, CEO of Kerbey Lane Cafe.
Ayer says just as sales were starting to build again since the coronavirus pandemic shut things down is when the storm swept through Texas. Ayer shut down all eight of his locations, because they lost power and water, losing out on $478,000 in revenue.
The CEO says he also still paid his roughly 300 employees while they couldn’t work — hundreds of thousands of dollars more that came out of the company’s savings.
Ayer says it “was a top priority for Kerbey Lane, because the staff had stuck with the company through a tumultuous year.”
He hoped to get that back through business interruption insurance, which pays for loss of revenue.
“Within most policies however that business interruption coverage is triggered by physical damage to the actual business,” said Camille Garcia, a spokesperson for the Insurance Council of Texas, which is a trade association of insurers.
Garcia says those words — “physical damage” — are key to claims. Something Ayer learned the hard way.
“Well listen, we didn’t have physical, but what we did have was no power and no water, therefore our business was interrupted,” he said. He explained to his insurance carrier.
Ayer says his insurance did reimburse him for other things, like roughly $13,000 in spoiled food and about $35,000 for a cooling system that needed work.
Garcia says insurance companies are starting to talk about subrogation, a process in which they would contact energy companies to pay for their customers’ claims.
“Looking at the at-fault party and the damages caused by their action, or lack thereof, and that’s what we’re looking at,” she said.
But with more than 200,000 winter-storm-related claims to process, Garcia says it may be a while until that happens and encourages customers to keep communicating and being persistent with their agents.
Ayer says he’s still working on his claim but won’t be “holding his breath.”
“We’ve been through a year of being kicked in the teeth, and this is just one more example of that,” he said.
The Texas Insurance Council says if you’ve exhausted all your options trying to push your claim through your insurance company, you can also contact the Texas Department of Insurance to intervene.