Hurricane Harvey, Now Hurricane Irma And Your Flood Insurance

Hurricane Harvey devastated Houston along with a swath of surrounding small towns. The damages are estimated to be in excess of $180 Billion. Irma hasn’t arrived as yet, but this storm is already being touted as a history maker. As a Category 5 hurricane she has sustained 185 mile an hour winds for over 24 hours.

I would like to offer my condolences and sympathy to all the victims of these horrific and destructive Hurricanes. The destruction and ruination caused is catastrophic and the only thing we can be certain of is that the cleanup will take years.

There is no amount of crying, yelling or screaming that will help, but yell, cry and scream just the same.  Try to get the anger and frustration out of your system bit by bit. The children with you may not understand, but they are feeling frightened and vulnerable, so hug them because they need your arms around them.

I am writing this so that the victims will find some small amount of solace in my words and hopefully some encouragement.

The overwhelming sense of loss is as deep as any knife wound. But there will be aid and assistance coming from may corners of our country and from other countries around the world through its people and organizations. Take a moment and stand in awe and gratitude that you made it this far, and trust you’ll be fine when this is behind you.

As an insurance expert I have worked on flood disaster claims for both Katrina and Sandy. More than 150 of my clients have received a combined settlement valued at several million dollars as a result of my efforts. As of this writing I am still working on several Sandy claims, yes 5 years later. For some, the claims process is expeditious, for others it can take several years.

My experience representing insureds, people like you, against insurance companies to battle flood claims is that too often there is a false belief that a homeowner’s policy will cover flood damages. Unfortunately, this is not the case. Flood insurance is a separate policy. Wind damage is often covered under your homeowner’s policy. Regardless, insurance companies will probably deny your claim even if it is wind damage and they will attribute it to the flood. I’ve been posting helpful articles that are designed to help you better understand your policies such as your Flood Policy.

 

SHOULD YOU HAVE FLOOD DAMAGE

Should you have flood damage and a flood policy, FEMA will limit its payment to flood damage. If you were hoping that logic would prevail, it doesn’t. They will explain that water did not touch the upper part of the house so painting all the walls will be limited to half the walls. Additionally, if you live in the house and have replacement cost building coverage, you will be paid the cost to replace but not beyond the policy limit. I cannot stress strongly enough to KEEP ALL RECEIPTS AND COPIES OF PAYMENTS.

Contents coverage is based upon depreciation, actual cash value, (ACV) so your television set will be devalued as will your clothes and other personal property. What this means is that you may not get enough money to replace your belongings. You can read more about this in an earlier post.

If your car was damaged,  it may be covered under your automobile policy and not flood or homeowner’s policy. If you have comprehensive coverage and your car is water logged or submerged in water, it is covered under your automobile policy as long as you have automobile comprehensive coverage, otherwise there is no coverage for your car.

People whose property has been damaged by either Hurricane Harvey or Hurricane Irma please be aware that this is going to be a long drawn out process and you may have to have your claim reexamined over and over. Many of the adjusters will be from out-of-town and do not know the cost of material and labor in your area.

Case in point last year 8/2016 a client of mine in Prairieville, LA suffered a flood lose due to the heavy rains. She was offered $55,000.00 from her insurer. Knowing that this offer was painfully low she engaged our services. Together with my professional licensed adjuster we assessed her damages at $112,000.00. Presenting the new adjuster’s report to her insurance provider she was then offered $66,000.00. Further discourse and negotiations brought an  $80,000.00 settlement offer and finally a $91,000.00, which she accepted. Unfortunately the difference of $21,000 from our adjusted amount of $112,000.00 was to small an amount for an attorney to take the case. That is the insurance company’s edge as they have attorneys and time that you don’t. You want to get back home, you want to get on with your life.

The above example is more common than you might think. I share this with you as I do not want anyone to be under any misconceptions that this is an easy process. It is not.

Insurance company and/or FEMA already has attorneys employed and more on retainer to handle any incoming challenges or lawsuits. They bet on the odds that you don’t have the time or budget to go through the long drawn out process of a challenge.

It is only the insurance process it does not take into consideration builders, construction, replacing personal property. Make sure you deal with a reputable builder check their credentials many unscrupulous people come into town take money and disappear or do a small amount of demolition and leave. CAVEAT EMPTOR – BUYER BEWARE.

With more than 49,000 homes damaged in the Houston area, it is reported that most do not have flood insurance.

For those people that do not have flood insurance your options are small. Maybe some of your damage can be attributed to wind and your homeowner’s policy might just cover a minimum amount. There will probably be programs set up by FEMA, SBA and your state government to assist. Some will be money grants and some will be low interest loans.

 

WHAT CAN GO WRONG

In one simple word EVERYTHING.

I have served as an insurance expert on a multitude of civil cases between insureds, insurers and insurance producers/brokers/agents. I have witnessed patterns of failings and misunderstandings. The standard flood policy is the same regardless if you purchased it from or directly from National Flood Insurance Program (NFIP) or from an insurance company.  There are variations of flood insurance coverage and different categories of coverage. Such as primary home, secondary home, vacation property or rental property.

These variations of policy types are made even more complex as each insurance company interprets the same verbiage differently.

As an example, with regard to ‘replacement’ one company may pay you initially the depreciated value of  your damaged home until you actually make the repair and then make a supplemental payment for the replacement cost, and this might have to be done within a certain time limit as opposed to an open ended claim. Another company may pay you the full replacement cost and you can make the repair at your leisure. Did you know that checks above $10,000.00 may be made payable to both you and the mortgage holder on your property? The bank will require you to present them with the insurance claim check. If you are up-to-date with your mortgage they may release the money. They may also hold back some money to be sure you repair the home since they are the mortgage holder on the property. If the home is totally destroyed, they may keep all the money to pay off your mortgage. This is a complicated process.

 

RECOMMENDED NEXT STEPS

It is my suggestion that you take your time. Make a list of the damaged property and all of the contents. Take pictures, many pictures. Pictures of the inside and the outside as well as more specific photos of content destroyed. Take measurements of the rooms damaged.

I would further suggest that you hire someone like me and my staff of adjusters and attorneys. We work for you on an as needed basis helping you secure the best possible outcome on your claim.

First, our adjuster will inspect your home and go over your list of damage. He will be available to talk to the insurance company’s adjuster. You can go online and obtain the prices to replace the damaged items or contents. He will then prepare a proof of loss, which is required by your policy to be filed with the insurer in a specific period of time. I will read all your policies to ascertain coverages and write a comprehensive report so that you have some documentation in hand. Hopefully the insurer will then give you a fair and reasonable settlement.

If this offer proves not to be acceptable to you, our attorneys are in a position to send a demand letter and we proceed from there. Hopefully a law suit will not be required.

I am not here to scare you or attempt to intimidate you in to hiring anyone, myself included, but I also do not want you to be misled. Should you have a question or two I will gladly answer them for you at no charge.

You can download the FEMA fact sheet that outlines the flood claim process.

Read over the ten points listed and realize that it always says what you should do. Do you have the time, knowledge or experience in doing it to FEMA’s satisfaction?

This article should not be considered as insurance advice. You should consult a licensed and reputable insurance broker who is familiar with your particular needs before purchasing insurance.