FEMA Publishes Guidance for Handling Flood Losses
The 2017 Hurricane Season was a brutal one. Seventeen named storms struck the United States causing a record-setting $200 billion in damage.
Much of this damage occurred not from high winds or storm surges, but from extended heavy rains that triggered major flooding.
In an effort to facilitate prompt post-inspection advance payments to policyholders, the Federal Emergency Management Agency (FEMA) published an outline of steps, serving as guidance for handling flood losses.
- Report the loss to your insurance agent or the insurance carrier, who will in turn assign an adjusting firm who provides an adjuster to assist you with presenting the support for your loss.
- The adjuster inspects the property (scoping visit) and may ask if you wish to request an advance payment from your insurer; the adjuster will send you a detailed room-by-room unit-cost estimate of damage and a proof of loss form. If you agree, the proof of loss form should be signed to and sworn to, and upon your insurer's review and agreement, the loss is settled.
- If you do not agree, you should work with your adjuster to find a dollar amount for the covered loss that can be agreed on. Also, working with your general contractor is helpful.
- If you are unable to reach an agreement with the adjuster, you should contact your adjuster's supervisor by calling the adjusting firm.
- The supervisor should work with you to find a dollar amount for the covered loss that can be agreed on.
- If you are unable to reach an agreement with the adjuster's supervisor, you should contact your insurance carrier's claims department to discuss the amount difference or coverage issue with the claim examiner.
- If you are unable to reach an agreement with the claims examiner, you should complete a proof of loss form for the total amount you are requesting (the disputed amount plus any additional amount), and then send the signed and sworn-to proof of loss form with documentation to support the additional amount you are requesting, directly to the insurance carrier claim examiner.
- If the insurer agrees with your documentation, they will pay the amount you are requesting; or they may provide the adjusting firm with their recommendation which may lead to an additional payable amount and a new Proof of Loss. If the insurer disagrees, they will issue payment for any undisputed amount, and a written denial letter will be sent to you fully explaining the reasons for the disallowance (denial) of your claim or any portion of your claim.
- If you agree with the denial or no longer dispute the decision, the loss is settled.
- For any denial of payment, in whole or in part, which you are disputing, three options remain:
- You may send an amended Proof of Loss with supporting documentation back to the claim examiner; see STEP 8
- You may submit a formal Appeal to FEMA
- A written appeal letter must be sent to FEMA within 60 days of your insurer's denial letter, along with a copy of the denial letter and the documentation you have to support your appeal.
- You may file a lawsuit against your insurer
- A lawsuit must be filed within one year of your insurer's first written denial letter and only in U.S. District Court in the district where the property is located at the time of the loss
- However, once you file a lawsuit, you may no longer appeal your claim to FEMA or file an amended Proof of Loss with your insurer.
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