Business owners who are trying to get back on track after hurricanes Harvey and Irma now face a different sort of challenge: trying to recoup lost income from their insurers.

Exclusions in the fine print of policies, along with waiting periods and disagreements over how to measure a company’s lost income, make business interruption claims among the trickiest in an industry renowned for complexity.

“I think the whole thing is a rip-off,” said Thomas Arnold, an optometrist in Sugar Land, Texas. He said his business, Today’s Vision, was shuttered for almost five days after Hurricane Harvey struck because nearby flooding kept employees and patients from getting there.

Arnold says he pays $1,083 per month for coverage. But after he filed a claim, he said his insurer rejected it because his business was not physically damaged.

Business interruption policies typically require “direct physical damage” as a condition of coverage, said Loretta Worters, a spokeswoman for the Insurance Information Institute, ainsurance industry-funded communications group.

It was Arnold’s second disappointing experience with business interruption coverage. He said another insurer denied his claim in 2008 after a nine-day power outage from Hurricane Ike.

Devastating storms are hitting the United States with increasing frequency. Risk modeling firm AIR Worldwide predicts losses to all properties from the flooding in Texas alone will be $65 billion to $75 billion, regardless of whether they are insured.

The income lost by shuttered firms makes up a significant chunk of overall losses from a natural disaster and can hobble the pace of a community’s economic and social recovery.

Hurricane Katrina in 2005, for example, caused about $25 billion in insured commercial losses, of which $6 billion to $9 billion has been attributed to business interruption, according to information posted on AIR’s website.

The National Flood Insurance Program (NFIP)does not offer a business interruption component. The program is largely used by homeowners, but it also covers commercial structures for up to $500,000 in damage, with another $500,000 for the contents.

That is why companies able to afford the additional protection of business interruption insurance, usually large and medium-sized firms, often purchase it despite the potential for unsuccessful and drawn-out claims.

Big Star Honda, a car dealership in Houston, lost 600 vehicles – 95 percent of its inventory – and was shut for five days after Harvey.

Its managers are now girding themselves for a potentially long slog with the firm’s insurance company as the dealership prepares to make a claim on its business interruption policy.

“We’re collecting every single invoice that pertains to the hurricane,” said Allen Paul, Houston regional vice president of Ken Garff Automotive Group, which owns the dealership.

“I’m really curious to see how that goes,” he said.

The dealership also has a flood policy through the NFIP, but relatively few firms do. As of June 30, 2017, the NFIP had just 264,681 non-residential policies, said a spokeswoman for the Federal Emergency Management Agency, the agency that runs the government-backed flood insurance program.

That figure covers businesses but could also include churches, private schools and community centers, and is a sliver of the estimated 2.4 million small businesses located in flood-prone Florida alone.

Number Crunching

Insurers such as Travelers Companies Inc and Hartford Financial Services Group Inc are bracing for a wave of claims from businesses in Texas and Florida.

They face a daunting task. The size and scope of the two storms, which pounded the states within two weeks of each other, affected everything from energy refineries to hoteliers.

“Insurers are craving information now,” said Allen Melton, Americas Leader of InsuranceClaims Services for Ernst & Young LLP. “They want to know how big a claim we are looking at and what the issues are.”

The answers to those questions are often difficult for businesses and insurance companies to pinpoint. Both sides often hire their own forensic accountants to comb through profit-and-loss accounts from the current and prior years.

It can take months, and sometimes years, for a policyholder to receive monies owed. Insurance brokerage Aon PLC is still working on claims from Hurricane Matthew, which struck South Carolina last October, said Jill Dalton, who leads claims for Aon.

Many business owners in the storm-ravaged Florida Keys are not even close to estimating their losses because they cannot get to their properties yet.

“When you have property damage, you can pretty much figure out how much it costs to buy nails and a hammer and wood,” said Gary Marchitello, North American Head of Property Broking for Willis Towers Watson PLC. “But reasonable minds can differ about how the business would have done if the loss hadn’t occurred.”

Payouts can hinge on factors such as whether a storm hits during a slow season or if a business can make up for lost time in another quarter.

Back in Texas, Arnold, the optometrist, is rethinking his coverage. “I’m going to sit down with my insurer and drastically cut my insurance,” he said.

“If my office burns down or a tornado hits it, I want coverage for that,” Arnold said. “But if people come in my office and steal my glasses, I’ll pay for that.”