Flood Insurance Claims - What to Know

Waterbury resident and CReW volunteer Emily Gilde brings her decades of experience in private property-casualty insurance to help decipher the most important things to know about your flood insurance policy, including steps you can take ahead of time to make the most of your flood insurance claim.

Dear Neighbors,

I am writing as a member of Waterbury’s Natural Disaster Preparedness Committee and a volunteer with CReW.  Although I’m not an insurance lawyer, I’ve spent decades working for property-casualty insurers as an actuary.

Over the past year, I’ve had the opportunity to work with several homeowners on their National Flood Insurance (NFIP) claims.  I am writing to share a few insights from this experience that may help others needing to file an NFIP claim in the future.

  1. Take photos BEFORE a flood:   A key cause of underpayment on claims is the difficulty of proving that the flood is responsible for damage; i.e., that the damage seen is not wholly or partially pre-existing.  For example, flood waters can widen cracks in basement walls and increase buckling, both of which can undermine foundational integrity.   But it is hard to prove that the flood is the cause without photographic evidence.  To establish pre-flood conditions, take photos of your basement walls NOW.  Be sure the photos show the size of any existing cracks and consider using a yard stick to establish the magnitude of any buckling.  This evidence may become invaluable if you do experience a bad flood.

  2. Understand the NFIP view on catastrophic losses:  Should you experience a devastating loss, you may determine (or be required) to make improvements to protect against future floods, such as elevating your home.  NFIP offers Increased Cost of Compliance coverage of up to $30,000 to defray some of the costs of complying with community flood plain rules.  (ICC has a separate, complicated process that I will not get into here!)  For most people, however, the larger source of payment is likely to be Coverage A, which covers your home’s existing structure.  Coverage A pays to repair or replace structures/items directly damaged by flood.  It is crucial to establish the in detail the cost of returning your home to its pre-flood condition – even if you are not going to put the house back to its pre-flood condition but are going to improve it!   Coverage A pays only to repair and replace the existing structure/items.  No changes, upgrades, or improvements.  This means getting written contractor estimates for this specific work.

  3. Role of the claims adjuster:  Soon after the flood event, NFIP will send an adjuster to inspect your property.  They will take notes, measurements, and photos.  Back at the office, they feed the information into a computer program that produces detailed estimates of the cost to repair your damage.  They will then email you a Proof of Loss Statement and, in many cases, pressure you to sign.  It is CRITICAL that you read this carefully and be sure that the details of the repairs described are sufficient to put the house into a pre-flood condition.  This can be really hard to do quickly.  If you’re like me, you may not understand all the technical details and after a flood, good luck getting hold of professionals to evaluate your damage!   It is true you can modify the scope of damage later, but it gets more difficult.  The Proof of Loss document is therefore crucial.  The NFIP contract states that the Proof of Loss is “your statement of the amount you are claiming under the policy signed and sworn to by you…”    If you and the adjuster do not agree on the scope of damage and repairs needed, then you should submit your own Proof of Loss form.  For example, if the adjuster says only one wall was damaged and you disagree, you must attempt to document this additional damage in your Proof of Loss statement.  What makes this process so challenging  is that an initial Proof of Loss must be received by NFIP within 60 days of the date of loss.  This is iron-clad.  If the adjuster fails to prepare a Proof of Loss for you, it is still on you to send one.  If the loss is severe, you should try to (1) get an engineer to evaluate the steps required to return the house to pre-flood condition, and (2) find a contractor to estimate the cost of doing what the engineer advises.  Then you send these two reports, together with a completed Proof of Loss form and its required attachments, to NFIP within 60 days.  Failing this, try to describe the damage broadly with photos and include your own best estimates of costs to repair.  Another option, if you and the NFIP adjuster disagree, is to engage a Public Adjuster.  The PA works for you and will take a % cut of your payout, if they succeed in getting you a larger settlement than the NFIP adjuster.   If you have a huge loss and just cannot deal with all the forms and the technical details, I would recommend calling a PA relatively early in the process.  At least see what they offer.

Here are links to the NFIP contract and a copy of the NFIP Proof of Loss form.  If you have NFIP insurance, I recommend you print these out and read them.  Having knowledge of these forms could save you thousands of $’s if you become a flood victim.  I hope you will never need them!  I also would be happy to try to address informally any questions you may have about the NFIP policy.  

Sincerely,

Emily Gilde

ecgilde@gmail.com