Jersey’s Seaside Boardwalk Fire Expected to Cause Multi-Million Dollar Insurance Loss

A raging fire that destroyed dozens of businesses along the Seaside Park boardwalk in New Jersey Thursday is expected to be a multi-million dollar insurance event, an insurance expert observed.

Residents watch as firefighters battle the fire at the boardwalk in Seaside Heights, N.J., on Thursday, Sept. 12. (Governor's Office/Tim Larsen)

The fire, propelled by strong coastal winds, swept through not less than six blocks in Seaside Park and Seaside Heights â€" areas that were freshly rebuilt after last year’s Superstorm Sandy.

From the insurance standpoint, the insurance checks would likely be cut right away for claimants since most businesses would have coverage against the peril of fireside, said Dr. Robert Hartwig, president and economist at the Insurance Information Institute.

“Most businesses carry property insurance policy and virtually all property policies cover the peril of hearth,” Hartwig told Insurance Journal.

“It’s extraordinarily tragic that it’s the same area that was struck hard by Sandy last year,” he said. “In the case of Sandy, most of the damages were done by flooding. And many of the businesses did not have flood coverage.”

“But this may be different â€" most businesses will be covered because they've coverage for standard property risks along with fire,” he said.

Hartwig said many businesses will also have business interruption coverage that may help tie them through until the point where their business could be reopened after it’s repaired or rebuilt.

Additionally, workers who might have been injured inside the flames or by smoke can be covered by workers’ compensation, though there haven't been reports of injured workers, he said.

“It generally is a good looking compressed timeline for buying these claims settled. There isn't a doubt thon there are adjusters already at the scene today,” he said. “And once they're allowed to enter the areas that were damaged, they could have the ability to begin the adjustment process and begin writing checks for businesses that suffered losses in this event.”

While it’s too early to get an extensive estimate, it’s going to be a multi-million dollar loss, he said, “because we're talking about 30 to 60 businesses of a six-block area, along with business interruption claims, in addition the hassle-free property damage. So it will likely be a multi-million dollar insurance event. It’s just unclear at this point what number millions that we're talking about.”

“In this case, the checks should be would becould very well be cut instantly for that reason incontrovertible fact that most businesses have coverage against the peril of fireplace,” Hartwig said. “But it also illustrates how important it is not to have any gaps in your insurance in case you compare this to the undeniable fact that many businesses did not have flood coverage last year.”

Hartwig said affected businesses contained in the Seaside area begin to make an assessment of their damages with photographs and begin to position together their paperwork if you want to document what they'd contained in the way of inventory, for example, for their businesses, “because all of so as to be relevant to the claims filing process.”