Flood Damages: Filing and Proving Your Claim

Over the last six months, South Louisiana residents and businesses have experienced unprecedented flooding events that exposed many property owners to the difficult process of filing a flood related insurance claim. While some of us learned these painful lessons in the aftermath of Hurricane Katrina and other storms, residents and businesses in many affected areas are new to the process and face dangerous pitfalls if their claims are not handled properly. This article is intended to give property owners a brief overview of what flood insurance is, what it isn’t, and some advice about dealing with your insurance company. For additional information about other forms of financial assistance, safety tips during clean up, and the first steps in filing a claim, please see here.
First, it is important to know how flood insurance is different from your homeowner’s or commercial building insurance. If your property is under mortgage, you are required to carry property insurance to protect your property against the risk of fire, wind damage, and certain other losses. If you are also in a designated flood zone, you are additionally required to carry separate flood coverage, because, as you probably know by now, flood damage is not covered by homeowner’s policies. Flood insurance policies may be provided from the National Flood Insurance Program (NFIP) directly or through private insurers, but, in either case, the federal government underwrites the policies and pays for covered losses. Regardless of the value of the property insured, these policies are capped at $250,000 for residential building coverage, $100,000 for contents, and $500,000 for commercial buildings (i.e., this is the most that the insurance will pay for a particular event).
Before your flood insurer will pay a claim, they will require a sworn proof of loss statement—essentially, a form itemizing all of your damages that you swear is true. The proof of loss statement must be provided within 60 days of the loss. The importance of this document cannot be overstated. If you do not file it timely, or if you fail to list all your damages, your right to recover for your losses could be gone forever.
DO NOT ACCEPT THE PROOF OF LOSS YOUR COMPANY PRESENTS TO YOU! As some of you have already experienced, some insurance companies send out their own adjusters (investigators) to evaluate the damage within the first few days or weeks of getting notice of a claim. Once the adjuster has seen the property, he/she prepares a written report noting the damages they observed and the costs of repairing or rebuilding. The adjuster will also present this report to the property owner with a proposed proof of loss statement relying on that report’s conclusions. If the property owner signs that proof of loss statement, they are admitting that the adjuster’s findings are correct and will be limited to recovering only what that adjuster has listed. Due to the number of claims being investigated and the relatively short amount of time to review them, it is easy for an adjuster to fail to include all covered damages in this initial report. That, of course, could result in a home or business owner being tragically underpaid for their losses.
To avoid this risk, property owners should have their own adjuster evaluate their damages and calculate the true cost of repairs. Likewise, rather than accepting the insurance company’s proof of loss, property owners should have their own attorney prepare a proof of loss statement to ensure that all damages are included and all claims are protected. An experienced attorney can also find and work with an adjuster for timely preparing your claim. You can bet that the NFIP and private insurers have attorneys on staff looking out for their interests, and you should too.
Here at Thornhill Law Firm, we have the resources for handling property and flood claims that you need to protect the assets you have left. Our access to professional adjusters to work for you and our experience negotiating with insurance companies after events like this could mean the difference between complete compensation or being left out in the rain.
IMPORTANT DEADLINES: FEMA recently granted a request to extend the proof of loss deadline for Louisiana residents and businesses for an additional 60 days. For many property owners, this means the deadline could be as early as December 12, 2016. A proper proof of loss can take weeks or even months to prepare, so don’t wait! Call us to get the process started today!