Understanding Flood Claims and Understanding the NFIP

 

 

 

The peril of flood has traditionally been uninsurable in the private insurance market due in part to the extreme risk and exposure flooding can cause. In 1968 the federal government enacted a law that set up the National Flood Insurance Program (NFIP) to provide assistance to residents and commercial property owners who purchased a flood policy. Today, most all flood matters are run by the private insurance carriers. So keep in mind that your standard property insurance plan does not cover flood. You must buy a separate policy from a private insurer. At the end of the day the U.S. Government will pay back all amounts the private market carrier has paid out plus a service fee to the insurance company who serviced the flood loss claim.

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There are many complex issues involved in the NFIP program in terms of filing a flood claim. One of many unique coverage issues relates to the definition of “flood” under the NFIP.  As an example, in order to qualify as a “flood” there must be “a general and temporary condition of partial or complete inundation of two or more areas of normally dry land area or of two or more properties (at least one of which is your property) from an overflow of inland or tidal waters; unusual and rapid accumulation or run-off of surface waters from any source; mud flow.” In plain English, a flood is an excess of rising water (or mud) on land that is normally dry.

 

A flood can stem from heavy rains, overflowing rivers, thawing snow, flash flooding and hurricane storms surges. The resulting damage from a flood event can include all types of complex issues, which will require expert analysis in order to prove the damages and support the claim.

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Also, be aware that if you have flood damage and have to use a water restoration dry-out company, you need to understand the rules in which FEMA and the National Flood Insurance Programs pays. If not, you may get stuck with a huge bill to pay or a lien on your property. Ever since Superstorm Sandy, these restrictions have become even more strict.

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As public adjusters who deal with flood issues on a regular basis, we recommend you read and understand your flood insurance policy before a loss, as it is limited in amounts and scope of coverage. Remember that the flood adjuster that is sent out by your insurance company typically has no real authority.  He or she can only write up a claim and submit it for payment consideration. Please read this article about adjusting a flood claim. While somewhat technical, it will give you an idea of your insurance adjuster is following best practices.  If you have a flood loss to your insured property, you need to be very mindful of the 60 day provision for filing a flood proof of loss. This places additional pressure on the insured policyholder to get all their damage documentation together in what can be a very limited amount of time. If this is not completed and you do not have your proof-of-loss form submitted within sixty days, it is likely your claim will not be paid!

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Please contact Corbitt Public Adjusting, LLC with any further questions regarding Flood Claims.

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