Flood Claims
Flood Insurance Claim Tips
Flood Insurance Buying Tips
FEMA Pitch to Residents is Wasteful, Critics Say
146 U.S. Levees May Fail in Flood
NoCal Storm Damage
Insurance Help for Louisiana Property Owners
Katrina Hurricane Damage Insurance Claim Help Library
Home Contents Claim Tips (pdf)
Top Twenty Tips for Recent Disaster Survivors (pdf)
Inventory/Personal Property Claim Worksheets
Flood Insurance Claim Tips for Homeowners and Businesses
1. NOTIFY YOUR AGENT AND INSURANCE COMPANY PROMPTLY THAT YOUR HOME IS DAMAGED AND YOU ARE FILING A CLAIM
Even if you do not carry a “flood” policy, or believe your damage may not exceed your deductible, you should notify your agent/broker and carrier in writing that you have sustained a loss and are filing a claim. Coverage for some flood related losses may be available under certain sections of your homeowners or business policy.
2. IF THE INSURANCE ADJUSTER TELLS YOU THE DAMAGE DOES NOT EXCEED YOUR DEDUCTIBLE – GET AN INDEPENDENT OPINION
The adjuster sent by your insurance company to inspect your home after a flood may not know how to look for and identify all flood-related damage. Do not blindly trust your adjuster, especially if he or she tells you no benefits are owed because the damage did not exceed your deductible. Your home is simply too valuable for you to rely on one person’s opinion.
3.REVIEW YOUR POLICY CAREFULLY
Look closely at your "declarations" page. This page states your name, address, policy number, categories of coverage, dollar limits, endorsements, lender, etc. Make sure you have the most current, up-to-date copy. Read the "Endorsements" (extras) that apply to your policy. Every endorsement has a code number that matches text in the policy. If you are confused, do not rely solely on your insurance company or adjuster for answers. Consult with professionals who specialize in advising or representing insurance consumers.
4. COVERAGE BASICS:
The same dollar amounts of coverage you have under your homeowners policy should suffice for flood coverage as well. CAUTION: Many homeowners' policies have a provision that increases your coverage above the limits stated on the declarations page under certain conditions. These are called "extended replacement" or "guaranteed replacement" clauses. The FEMA flood policy does not have this provision. Your limits will be exactly as stated on the declaration page. For more information see UP's TIPS ON FIRE CLAIMS.
5.DO NOT BE PRESSURED INTO A QUICK SETTLEMENT AND DO NOT SUBMIT A CLAIM FORM THAT SAYS “FINAL” OR “FULL” UNTIL YOU ARE SURE YOU UNDERSTAND YOUR RIGHTS, YOUR COVERAGE, AND THE FULL EXTENT OF YOUR CLAIM.
Your adjuster may try to rush you into a fast settlement. Unlike other forms of coverage, your insurance company may farm out all policy services regarding flood coverage to companies that do not even specialize in insurance. The person actually adjusting or deciding your claim may not be trained or even knowledgeable about flood coverage. He or she may tell you that damage pre-existed the flood. Don’t be railroaded. Documenting a major loss to ensure a full, fair recovery requires work. Before you know the true amount of your insurance claim, you must get estimates from reputable contractors, and inventory all lost or damaged possessions. This takes time. A licensed structural engineer should fully inspect and tell you the scope of necessary repairs so you can have a reputable contractor provide an estimate based on that scope.
IMPORTANT: Because flooding leaves water in walls and hidden areas, mold, mildew, and fungus may grow inside the house. Some of these can be extremely dangerous. -- You should monitor your house by having a licensed environmental hygienist test the air inside your home.
6.BE AN INFORMED, ASSERTIVE CLAIMANT
Organize all papers related to your claim. A three ring binder with folders is generally the best system. Keep a diary. Record the names, phone numbers, job titles, and supervisor's names of everyone you speak with, and keep detailed notes of all pertinent conversations. Take photos of the damage and keep copies in a safe place.
Communicate with your neighbors, find those insured with your insurance company and meet with them regularly to share information and ideas on securing a fair settlement.
If your adjuster is uncooperative, complain in writing. If you feel your claim is not being handled fairly, contact a qualified attorney or public adjuster who specializes in representing policyholders.
7.BE SURE YOU ARE FULLY COMPENSATED FOR YOUR "ADDITIONAL LIVING EXPENSES" OR "LOSS OF USE"
Keep all receipts for meals, lodging, and purchases to replace damaged items from the time you must vacate your home until it is fully repaired. Policies vary on how long this coverage lasts and how much you can recover.
8.BE EXTREMELY CAUTIOUS ABOUT THE REBUILDING OF YOUR HOME. YOU ARE ENTITLED TO "LIKE KIND AND QUALITY"
Insurance companies may pressure you to accept their contractors’ cut-rate repair estimates or short-cut repair methods. Check with your local Building Department and reputable contractors who have experience repairing flood damage.
If the adjuster tells you there is no damage inside walls or flooring -- get a second opinion. Push for the best inspection methods on your engineer's recommendation. Don't settle for limited testing. (E.g., inspecting walls by drilling holes in them is not as good as actually tearing off the sections of the wall in areas with suspected damaged.)
9.DEMAND THAT YOUR CLAIM BE SETTLED FOR THE AMOUNT OF YOUR OWN CONTRACTOR'S ESTIMATE. YOU DO NOT HAVE TO ACCEPT THE INSURANCE COMPANY'S CONTRACTOR OR ESTIMATES.
- Beware of "lowball" estimates from insurance company adjusters and contractors with whom they have relationships.
- Beware of out-of-state, inexperienced or unreliable contractors without proper insurance of their own.
- If the flood made pre-existing damage worse, you’re covered for the necessary repairs.
- Some flood repairs are expensive, especially hidden damage in walls and floors. Wet and mildewed areas can be potentially hazardous. Monitor your air after any flood, especially if you smell mold, mildew, or musky odors. You may have to fight to get the full amount of policy benefits you paid for.
- Don't be penny-wise and pound-foolish by refusing to pay experts to advise you on the scope of damage and cost of repairs. They will help you prove your claim.
10.DO NOT SIGN "RELEASES" OR WAIVERS OF YOUR RIGHTS OR ALLOW YOUR INSURER TO RECORD AN INTERVIEW WITH YOU WITHOUT CHECKING WITH AN ATTORNEY WHO HAS EXPERIENCE REPRESENTING INSURANCE CONSUMERS, (POLICYHOLDERS)
Read all documents carefully, including both sides of all checks, to make sure they do not contain "final" or "release" language. You should not need to sign a "waiver" or "release" to get monies owed on your claim. Your insurer has the right to take your recorded or sworn statement if it has questions about your claim, but it makes sense for you to check with a lawyer. Signing a final proof of loss prematurely or making a mistake on tape may hurt your ability to fully recover the policy benefits you need to repair your home properly.
11.IF YOUR BUSINESS WAS DESTROYED — ALL THE ABOVE APPLY
Flood Insurance Buying Tips
ABOUT FLOOD INSURANCE
1. MOST FLOOD INSURANCE IS SOLD THROUGH A FEDERAL PROGRAM
Almost all flood insurance written for homes in this country is part of the National Flood Insurance Program ("NFIP"). This program was created by the U.S. Congress and is administered and regulated by the Federal Emergency Management Agency ("FEMA").
The national flood insurance policy can be purchased either directly from FEMA or from private insurers such as State Farm, Farmers, Allstate, Aetna, and many others. Premiums collected by these companies are divided among them for the administration of the claims expenses with the rest turned over to FEMA and deposited into the U.S Treasury. Benefits paid by the private insurance companies on flood claims under the flood policy are reimbursed by FEMA from the U.S. Treasury.
Many insurers subcontract all policy administration and claims handling to outside companies. It is not uncommon for the private insurer whose name appears on the policy, and from whom the insured purchased the insurance, to have nothing whatsoever to do with the policy or the claim handling. As such, tremendous authority for the administration of the policies and the handling of claims has been delegated to obscure companies, some of whom are merely data processing businesses.
2. CAN ANYONE BUY A FEMA FLOOD POLICY?
If you live in a flood-prone area—YES, as long as your area is in compliance with FEMA standards for flood control. The National Flood Insurance Program includes two primary components: (1) standards and specifications for municipal entities to follow for their drainage and flood control along with the establishment of "flood zones" and certain construction standards for homes built within those municipal areas; and (2) a uniform flood insurance policy that is underwritten and administered by FEMA.
FEMA rates municipal entities participating in the national program in order to determine the flood policy's availability and cost factor for that area. Property owners within the boundaries of municipalities that do not comply with FEMA standards for flood control are generally not eligible for the FEMA flood policy. Conversely, homes in "flood zones" within the boundaries of participating municipalities are usually required by lenders to be insured under the FEMA flood policy.
3. CAN I BUY FLOOD INSURANCE FROM A PRIVATE INSURER?
Probably not, unless you are buying it to cover a business. Such policies have nothing to do with the NFIP, FEMA, or the federal government. Like earthquakes, floods are generally excluded under most property policies. So if a business wants flood coverage it must be purchased separately.
A common type of privately-issued policy that covers floods is referred to as a "Difference in Conditions" (DIC) policy. Flood and earthquake are the most common perils covered under a DIC policy. Sometimes, an insured can simply pay a premium to remove the flood exclusion from a basic commercial property policy so flood becomes a covered peril. Often, when this is done, some type of sublimit less than the full limits of the policy is applied to differentiate the amount of coverage available for flood.
4. WHAT DOES A FLOOD POLICY COVER?
Flood policies generally cover damage to real and personal property from flood water. Coverage generally includes clean up, repair of water damaged property including inside walls, and remediation of resulting mildew, mold, and fungus.
In addition to water damage from flood, the FEMA flood policy also covers damage due to "mudflow". However, the policy does not cover landslide damage, and issues can arise regarding the distinctions between the two. Generally "mudflow" is liquid-like flowing mud that inundates the insured home.
Under commercial flood policies, business interruption coverage is usually available to cover lost income in addition to the property damage coverage.
Other types of coverage may be available. Ask your insurance agent or consult an attorney about specific types of coverage that might be applicable to your situation.
TIPS FOR BUYING FLOOD INSURANCE
1. Make an informed decision on the risk of a flood damaging your property. Check locally available flood zone maps (real estate brokers have them) to see if your property is located in a National Flood Insurance Program, ("NFIP") participating area. Consider your region's flooding history and your property's proximity to levees and waterways.
2. Even if you're not in a designated flood zone you can generally buy flood insurance if you are willing and able to pay for it. The price of the coverage goes down in lower risk areas.
3. Call a reputable insurance agent or broker and get a quote for adding flood coverage to the risks your property is insured against. Don't assume your home is not at risk for flood damage just because you are not legally required to buy flood insurance. If an agent/broker tells you they don't sell it or you can't buy it, call elsewhere. Some agents won't sell flood coverage because they're not familiar with the policies and may be reluctant to learn the rules of the NFIP.
4. If you decide to buy flood insurance, make sure you buy adequate coverage limits . Flood policies generally have fixed dollar amounts for dwelling and contents coverage that don't adjust upward if replacement costs prove higher than expected. Flood policies generally don't cover temporary living expenses while your home is uninhabitable or landscaping, trees, etc. If you buy a flood policy, you want it to cover the full replacement of or repairs to your structures, personal or business property, debris removal, business interruption, recreation of valuable papers, damage to property of others, etc.
5. Verify with your agent that you have “replacement cost” coverage and “code upgrade” coverage — especially if the insured structure is older than five years. Code upgrade coverage covers the cost of rebuilding in compliance with current building codes, even if means making improvements.
UP thanks attorneys Joel Gumbiner and Amy Bach for the preparation of this flood information and tip sheet. Joel Gumbiner is a policyholder attorney with Gumbiner & Eskridge in Walnut Creek, California. Amy Bach is co-founder of United Policyholders and was a policyholder attorney in private practice before becoming Executive Director of UP.
146 U.S. Levees May Fail in Flood
as posted at news.aol.com
January 29, 2007
By Peter Eisler
USA Today
(Jan. 29) - The Army Corps of Engineers has identified 146 levees nationwide that it says pose an unacceptable risk of failing in a major flood.
The deficiencies, mostly due to poor maintenance, are forcing communities from Connecticut to California to invest millions of dollars in repairs. If the levees aren't fixed, the Federal Emergency Management Agency (FEMA) could determine that they are no longer adequate flood controls. If that happens, property owners behind the levees would have to buy flood insurance costing hundreds of dollars a year or more.
The substandard levees are being identified under a corps inspection program that has grown more aggressive since Hurricane Katrina overwhelmed levees across the Gulf Coast in August 2005. Thousands of residents who lost property did not have flood insurance because those levees were considered adequate; later reviews found many were not well maintained.
"The corps and FEMA are saying, 'We've been lax as a nation in our operation and maintenance of these levees, and it's time to tighten up,' " says Larry Larson, director of the Association of State Floodplain Managers, an organization for officials who run flood-control systems. "You're talking about risking a lot of lives if one of these fails."
After Katrina, Congress directed the corps and FEMA, which administers federal flood insurance, to identify at-risk levees. The corps inspects about 2,000 levees nationwide, mostly larger ones. The corps provided USA TODAY only with a list of how many faulty levees have been found in each state.
Spokesman Pete Pierce says the corps does not want to release the list of the 146 places where levees have been identified as inadequate until all levees are inspected and all communities with faulty levees are notified. USA TODAY has filed a request for that list under the Freedom of Information Act.
Thousands of levees are spread across every state. They range from miles-long levees protecting major cities to small berms shielding crops. Many were built by the corps and turned over to local authorities, which are responsible for maintaining them.
Local officials fear that some cities cannot afford upgrades. Hartford, Conn., spent $5 million last year to meet the corps' demands for repairs. Otherwise, thousands of properties worth almost $2 billion would have needed flood insurance, City Engineer John McGrane says. "It's a tremendous burden," he says.
The corps is allowing a one-time, one-year grace period to do the work, says Maj. Gen. Don Riley, the corps' director of civil works. "We want communities to clearly understand the risks of not maintaining these levees and take responsibility," he says.
Where the At-Risk Levees Are
(Jan. 29) -- The Army Corps of Engineers' most recent accounting of levees that pose an unacceptable risk of failing in a major flood:
Alaska -- 2
Arkansas -- 13
California -- 42
Colorado -- 2
Connecticut -- 5
District of Columbia -- 4
Georgia -- 1
Hawaii -- 3
Illinois -- 4
Indiana -- 1
Iowa -- 1
Kansas -- 1
Kentucky -- 4
Louisiana -- 6
Maryland -- 2
Massachusetts -- 5
Michigan -- 4
Nebraska -- 1
New Hampshire -- 1
New Mexico -- 5
North Dakota 1
Oregon -- 14
Pennsylvania -- 7
Puerto Rico -- 4
Rhode Island -- 2
Texas -- 1
Utah -- 2
Virginia -- 1
Washington -- 6
West Virginia -- 1
United Policyholders is a non-profit organization founded in 1991 and dedicated to educating the public on insurance issues and consumer rights. UP publishes educational materials and serves as a resource for individual and business policyholders and residents of communities with insurance problems. UP’s Amicus Project provides information to courts of law to support policyholders’ legal rights. UP unites policyholders and their advocates by sharing information. Write to UP at 110 Pacific Ave., PMB 262, San Francisco, CA. 94111, call us at (510) 763-9740, or visit our website at www.unitedpolicyholders.org.
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