On June 7, 2018, the Federal Emergency Management Agency (FEMA) issued a memorandum regarding claims handling procedures under the National Flood Insurance Program (NFIP) for the 2018 hurricane season. Addressed to NFIP adjusters, the memorandum adopts various “enhancements” that are designed to make it easier for homeowners to secure coverage in the event of a damaging storm. However, it also clarifies certain limitations on NFIP coverage; and, for homeowners with NFIP flood insurance, understanding what to expect during the claims process will be important to securing coverage as quickly as possible.
Advance Payment, Prior Losses, Substantial Damage and Other Considerations for NFIP Claims in 2018
Some of most important topics covered in FEMA’s June 7, 2018 memorandum include:
1. Advance Payment Following Notice of Loss
Under appropriate circumstances, FEMA is allowing insurers to offer advance payments to policyholders whose homes suffer storm damage during 2018. Policyholders will be eligible to receive up to $5,000 in pre-inspection advance payment if they:
- Have paid all premiums and deductibles;
- Submit a timely notice of loss; and,
- Submit conformation that the damage to their home was the result of a flood.
Policyholders will be eligible for up to an additional $15,000 in pre-inspection advance payment if they submit:
- Photographs of the flood damage;
- Documentation of their out-of-pocket repair and replacement costs; and,
- An itemized estimate for necessary repairs and replacements.
Finally, policyholders will be eligible for advance payment of up to 50 percent of the value of their claim upon submission of:
- An itemized estimate prepared by a licensed contractor; and,
- Verification of coverage by an insurance adjuster.
2. Filing a Claim After a Prior Loss
If your home has previously suffered flood damage, any unrepaired damage will be excluded from coverage for a claim filed as a result of a storm occurring in 2018. Normally, NFIP insurers are required to obtain prior claim files before assessing a claim where there is evidence of a prior loss. However, under FEMA’s current guidance, flood insurers will be allowed to process claims as long as there is, “substantial evidence of completed repairs following a prior flood loss.”
3. Prompt Handling of Claims Involving Substantial Damage
In situations where an initial inspection reveals that there is probable substantial damage to a policyholder’s home, NFIP insurers have an obligation to process the homeowner’s claim on a timely basis. “Substantial damage” is defined as, “damage from any origin in which the cost to repair equals or exceeds 50 percent of the market value of the structure at the time of the flood.”
While insurance companies must handle all claims in good faith, this new guidance is designed to help ensure that homeowners with significant property damage will be able to receive payment and begin the rebuilding process promptly. Of course, whether insurance companies will adhere to FEMA’s guidance in the wake of a major storm remains to be seen.
Property Damage Lawyers for Homeowners in Fort Lauderdale, FL
If your home has been damaged in a hurricane or other major storm and you are struggling to obtain coverage under your NFIP flood insurance policy, we can help. Our attorneys have extensive experience representing homeowners in coverage disputes with their home and flood insurance companies. For more information, call our Fort Lauderdale, FL law offices at (954) 928-9568, or send us your contact information online and we will be in touch shortly.