FILING A FLOOD INSURANCE CLAIM

What is a flood?	Are losses from water seepage, sewer backup, or hydrostatic pressure covered?
What flood losses are covered?	Does the flood insurance program apply a deductible to losses?
How does a policyholder file a claim for flood loss?	Are costs of preventive measures covered under the Standard Flood Insurance Policy?
What is a "proof of loss"?	Does insurance under the NFIP provide coverage at replacement cost?
What is a "loss in progress"?	What is the maximum that can be collected for a loss under the NFIP?
Is a "loss in progress covered?

What is a flood?

"Flood" is defined in the Standard Flood Insurance Policy, in part, as:

 A general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters or from the unusual and rapid accumulation or runoff of surface waters from any source.

What flood losses are covered?

The Standard Flood Insurance Policy contains a complete definition of the covered perils. Direct physical losses by "flood" are covered. Also covered are losses resulting from erosion caused by waves or currents of water activity exceeding anticipated cyclical levels or erosion accompanied by a severe storm, flash flood, abnormal tidal surge, or the like. Damages caused by mudslides (i.e., mudflows), as specifically defined in the policy, are covered.

<Back

How does a policyholder file a claim for flood loss?

A flood insurance policyholder should immediately report any flood loss to the insurance agent who wrote the policy. A claims adjuster will be assigned the loss, and the policyholder must file a "proof of loss" within 60 days of the date of loss. A policy holder whose policy is with a Write Your Own company must follow the company's procedures. The 60-day time limit for filing a proof of loss remains the same.

When the anticipated number of claims exceeds a predetermined number after widespread flooding, an Integrated Flood Insurance Claims Office is established at the site to assist insurance agents and adjusters in providing prompt service to policyholders.

<Back

What is a "proof of loss"?

A proof of loss--the policyholder's valuation of claimed damages--is a sworn statement made by the policyholder that substantiates the insurance claim and is required to be submitted to the NFIP or Write Your Own company within 60 days of the loss. A printed form usually is available from the adjuster assigned to the claim.

<Back

What is a "loss in progress"?

A loss in progress occurs when actual flood damage to a building or its contents started before the inception of the policy.

<Back

Is a loss in progress covered?

The Standard Flood Insurance Policy does not cover damage caused by a loss in progress.

<Back

Are losses from water seepage, sewer backup, or hydrostatic pressure covered?

These losses are covered only when they occur in conjunction with a general condition of flooding in which the insured property has been, at the same time, damaged by flood.

<Back

Does the flood insurance program apply a deductible to losses?

A minimum deductible is applied separately to a building and its contents, although both may be damaged in the same flood. Higher deductibles are available, and an insurance agent can detail the range of specific amounts of available deductibles. Optional higher deductibles reduce policy premiums, but most will have to be approved by the mortgage lender.

<Back

Are costs of preventive measures covered under the Standard Flood Insurance Policy?

Some are. When an insured building is in imminent danger of being flooded, the reasonable expenses incurred by the insured for the purchase of sandbags, sand to fill them, plastic sheeting and lumber used in connection with them, the cost of pumps, fill for temporary levees, and wood will be reimbursed to the insured up to the amount of the minimum building deductible ($500). No deductible is applied to this coverage.

<Back

Does insurance under the NFIP provide coverage at replacement cost?

Only for one type of building, and if several criteria are met. Replacement cost coverage is available for a single-family dwelling that is the policyholder's principal residence and is insured for at least 80 percent of the building's replacement cost at the time of the loss up to the maximum amount of insurance available at the inception of the policy term. Replacement cost coverage does not apply to manufactured (i.e., mobile) homes smaller than certain dimensions specified in the policy or to most condominium units.

Contents losses are always adjusted on an actual cash value basis. If the replacement cost conditions are not met, the building loss also is adjusted on an actual cash value basis.

<Back

What is the maximum that can be collected for a loss under the NFIP policy?

An insured will never be paid more than the value of the covered loss, less deductible, up to the amounts of insurance purchased, so purchasing insurance to value is an important consideration. The amount of insurance a property owner needs should be discussed with an insurance agent or broker.

<Back

Give us  we want to hear from you!