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.